A daily stock analysis based on stock market today
  • Daily Roll
  • YouTube
  • Podcast
  • Investor Hubs
    • Starter Investors Hub
    • Dividend Seekers Hub
    • The Risk Hub
    • COVID-19 Investing Hub
  • Sign Up
  • Boot Camp

TAL and EDU: Revisiting the Chinese Education Stocks Plummeting from Regulation Fears

7/23/2021

 

KEY POINTS

  • The DOW and S&P hit record highs as the indices ended the week in the green.
  • The Olympics kicked off Roku (ROKU) stock’s gains today as shares near an all-time high.
  • Chinese education stocks (TAL and EDU) suffer from regulatory uncertainties as the government explores turning the sector into a not-for-profit.

OVERALL MARKET

The DOW and S&P hit record highs as the indices ended the week in the green.
Picture
Stock market indices finished the week in the green. 

The 10-year Treasury yield rose slightly, showing signs that inflation concerns are more short-term. This eases some of the tension from the yield dropping days ago. 

Moreover, this earning’s season has been an optimistic one. Investors are pleased with the recent performance of the stocks, especially in the S&P 500, where 90% of companies are reporting a positive surprise in revenue year-over-year this quarter.

GET THE DAILY MARKET RECAP

Did you know you can get your Daily Market recap report on YouTube, listen to it on our Podcast, or get it in your inbox?

Watch it,  
Listen to it, 
Or, read it.  
 
Sign up for a free Stock Card account to get the report in your mailbox every day.
GIVE STOCK CARD A TRY!

WHAT'S UP?

The Olympics kicked off Roku (ROKU) stock’s gains today as shares near an all-time high.
Roku (ROKU) stock ended the week with a bang, coming just shy of it’s all time high with more than a 12% jump today. This jump earned it a spot on Stock Card’s list of winning stocks today. The opening ceremony of the Olympics was held earlier in the day, and kickstarted a great trading session for the streaming service company. Roku landed the right deal at the right time when it came to an agreement with NBCUniversal to be the home of the network’s Olympic coverage. 

Viewer count is bound to grow over the course of the two-week event. But, it's not all about the Olympics! Roku has been hot this year already. The company’s first quarter earnings report this year boasted a 35% growth in accounts registered on the streaming service, and that’s not to mention the 101% growth in revenue from the platform year-over-year. Roku is doing great, even as shutdowns are phased out and people return to events outside their homes. 

If you head to it’s Stock Card, you can see that it is killing the game in Profitability, Sales Growth, and Cash Availability. Scrolling down a little further, you can see that investors have had great returns over the past few years compared to the S&P 500. 

Roku was once an underdog that no one believed had a fighting chance in the streaming war, and now it is leading the market. If you invest in a well-managed company and ignore the volatility, you’ll find a more dependable way to grow your investment.

WHAT'S DOWN?

Chinese education stocks (TAL and EDU) suffer from regulatory uncertainties as the government explores turning the sector into not-for-profit. 
​If you remember, we covered TAL Education Group (TAL) andNew Oriental Education & Technology Group (EDU) in a daily recap a little over a month ago. Chinese regulators were beginning to reassess the tutoring and private education industry, and the future of these companies was suddenly up in the air. In that episode, I recommended that you stay away from the dip, as attractive as it looked. Throughout the rest of June, both TAL and EDU regained some ground. Naturally, some fellow Stock Cardians were asking questions! How come they went up? 

Fast forward to today. Both TAL and New Oriental Education stocks took a nosedive. On today’s loser list on Stock Card, TAL was down over 70% by close, and EDU followed closely behind with a 54% drop. Sources informed Bloomberg that Chinese regulators are considering turning million-dollar tutoring businesses into non-profits and binding them from being publicly listed, among other possible legislative changes. 

This is an example of how you should approach companies that are dealing with regulation changes. The stock may have seemed like a great opportunity to enter at a low price and may have even shown some growth. Still, the regulatory changes are completely out of the control of investors and even the company themselves. You want to avoid betting on such uncertain situations. There’s no guarantee that the government cares for the profitability of any given company, no matter how much analysis you’ve been doing on the fundamental or technical aspect of the stock.  For now, even if I lose a chance for significant gain, I don't think the uncertainty is worth the potential upside. To me, once again, this is not a buy-the-dip opportunity.

STOCK PICKS

Portfolio Update by The Next 10X Portfolio
This week, Alex Koh, Stock Card partner and the YouTuber behind "Family Investment YouTube" and The Next 10X Stock portfolio on the Stock Picks page, updated his portfolio and added his next 10X stock pick. He also published a video talking about his stock analysis.

​Make sure to watch his latest Best Buy Now video:
​

WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?

Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
GIVE STOCK CARD A TRY!

Comments are closed.

    RSS Feed


    Archives

    December 2022
    September 2022
    July 2022
    February 2022
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    February 2021
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    January 2020
    October 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017

    Categories

    All
    Battle
    Education
    ETF Investing
    How To Invest
    New Podcast Episode
    New Portfolio
    Portfolio Update
    Starter 2020
    Stock Card VIP Pick
    Stock Lists
    The Daily Hype
    Update
    Watchlist Worthy
    Winners And Losers

© 2023 StockCard.io. All Rights Reserved.
​​
Disclaimer: StockCard.io is not, neither operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on StockCard.io and Stock Card Weekly represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The Stock Card team may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall StockCard.io be liable to any subscriber, visitor, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on StockCard.io, or relating to the use of, or inability to use, StockCard.io or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way.
  • Daily Roll
  • YouTube
  • Podcast
  • Investor Hubs
    • Starter Investors Hub
    • Dividend Seekers Hub
    • The Risk Hub
    • COVID-19 Investing Hub
  • Sign Up
  • Boot Camp