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Welcome to Profit Confidential • Tuesday, May 22, 2012

Where the Best Moneymaking Opportunities Are

Wednesday, January 17th, 2007
By Mitchell Clark, B.Comm. for Profit Confidential

I’ve been writing a lot about China stocks lately. This isn’t by design — it’s a reflection of where some of the best moneymaking opportunities are in the equity speculation market.

Right now, we’re just at the beginning of the fourth quarter earnings season. If we hear good news from corporations, the broader market will rally. If there’s bad news, the market will likely tank. My bet is that the fourth quarter earnings will be very good. Corporations continue to run very lean operations, and profitability is amazingly solid, even in the face of a slowing economy.

Getting back to China stocks, however, I have to mention one of my favorites, New Oriental Education (NYSE/EDU). This company just reported solid financial results, and the stock is going up again. When I first brought this company to your attention in November of last year, the stock was trading around $25 per share. Now it’s trading around $38!

EDU is in the business of selling education in China. This pure play Chinese company sells a range of educational services, targeting youngsters and adults with full primary and middle school education, as well as English language training and a variety of other courses. The company publishes all kinds of educational material, provides online courses of study, and operates private schools throughout the country.

Founded in 1993, EDU now boasts over three million student enrollments. Over 800,000 new student enrollments occurred in 2005. Currently, the company operates a network of 25 schools, 110 learning centers, and 13 New Oriental bookstores, and it employs some 1,700 teachers in 24 cities. The company’s online network currently also boasts some two million registered users.

In its latest quarter, the second fiscal quarter of 2007 ended November 30, 2006, the company generated sales of $21.6 million, representing a 33% increase over the same quarter of the previous fiscal year. Net income for the quarter was approximately $1.0 million, as compared to a net loss last year.

The company finished the quarter with $149 million in cash, and its sales growth is being driven by an increase in student enrollments in both language training and test preparation courses.

EDU has great potential to cash in on China’s burgeoning economy. If you invested in this company, I have a feeling you will be blessed with good fortune.

 

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Profit Confidential AuthorMitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.

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