Why New Oriental Education Rose on an Awful Day for the Market
One of the rare stocks that defied gravity during Monday's market meltdown was New Oriental Education & Technology Group (NYSE: EDU). The Chinese educational services provider's shares popped by nearly 6% on the day thanks to a bullish new analyst note, while the S&P 500 index suffered a queasy decline of almost 4%.
Said bullish note came from JPMorgan Chase's near-eponymous J.P. Morgan investment bank. Analyst DS Kim upgraded his recommendation on the stock from neutral to overweight (equivalent to buy). Kim also boosted his price target on New Oriental to $24 per share, from a previous target of $14 per share.
The analyst's theory is that while there remain uncertainties regarding the Chinese government's stance on the for-profit education industry, New Oriental's stock has been battered to the point where it's a compelling buy. Several fundamentals and valuations support this -- one cited by Kim is the company's net cash position, which at $4.3 billion is actually well higher than its current market capitalization.
Source Fool.com
