Education Development Share Discussion Threads

[cockneyrebel] 28/3/2009 18:40

Sorry Roughjustice, they are the number 2 in NVQ exams.

Means there's plenty of players to make a bid for them then :-)

CR

[nurdin] 28/3/2009 18:23

I am actually pleased about that...means EDD have a lot of growth to go for in a consolidating market.Pearson might even dispose off their non-core activities and who is to say EDD wont be there to grab their share?

[cockneyrebel] 28/3/2009 12:51

Jim Slater

I don't know if you read here but take a look at SEPU - fits your Zulu criteria every bit as well as EDD imo and only this low due to a distressed seller imo.

CR

[interceptor2] 25/3/2009 20:10

AEC Education looks an interesting company, EDD think so after taking up the rights offer to take holding to three million shares. Results are due in May and are expected to be very impressive. I was researching them again today, and fancied holding a similar company to EDD but in the far east. But one major problem, the spread is between 15 to 22p or 32% which in my view is totally untradable, will keep an eye on them upto results, but even if I can buy at a more sensible level, it may be difficult to sell again.

I will content myself with EDD for now which go from strengh to strengh.

[chester] 25/3/2009 19:59

....and the charts a beaut.

[cockneyrebel] 25/3/2009 19:52

Slaters followers will be buying tomorrow imo.

CR

[cfro] 25/3/2009 18:31

We will see this share really motor now. ;-)

[nurdin] 25/3/2009 18:16

Glad I added earlier this week at 65p...:o)

[bookworm1] 25/3/2009 16:56

And that is after he wrote his article recommending EDD. According to the company web site as at 30th Nov 2008 only four other shareholders held more than 6%

Wynford Dore (Founder) 9,000,300 15.6
Goldman Sachs (GAM) 5,091,500 8.8
Octopus Investments Limited 3,792,000 6.6
Hargreave Hale Limited 3,754,300 6.5

As far as I see it there are two possible reasons for his interest in EDD

1. The government is really starting to push diplomas now I keep seeing their adverts everywhere on billboards, buses and on the radio.

2. The company is starting to market itself into South Asia vie AEC.

[cockneyrebel] 25/3/2009 16:36

Jim Slater increases his holding to 4.4%

CR

[nurdin] 25/3/2009 12:02

Breaking out now...:o)

[cockneyrebel] 23/3/2009 12:36

Slater says it all - way too cheap fo a co growing in a market that is beneficial to their products.

Where can you find anything that is benefitting from this market? EDD has to be one of the few exceptions.

MM's seem to be scratching around for stock again.

CR

[bookworm1] 23/3/2009 11:35

Here is the text from the IC article about EDD:

Education Development (EDD) is my second choice. It is a leading educational quality assurance company, government approved and regulated with UK and international reach and expertise in IT-based product delivery and administration.
In the UK, EDD has over 300 accredited vocational qualifications, 279 specialist awards and approved programmes, 1,873 registered centres, 200,000 candidate registrations a year and over 650 school customers for online assessments. EDD also has a strong and growing position in the larger international market with over 4,500 registered centres across 103 countries and 275,000 candidate registrations a year.
As a result of a recent bullish announcement by EDD, Brewin Dolphin, the company's broker, has increased its pre-tax forecast for 2009 by over 50 per cent to £5.6m with eps 9.4p. Based on a low tax charge as in the past years, EPS of 9.4 at 56.5p would result in a prospective PE ratio of only six. With forecast EPS growth of 65 per cent the resultant PEG is absurdly low at 0.1. The company is also cash-generative with a net cash balance of over £3m at the end of 2008. My own buying, resulting in a current holding of 3.7 per cent, has contributed to the share price having a great run during the past couple of months. And after the announcement of increased profit expectations, there was further buying by directors, who added to their already significant shareholdings.
The tax charge has to be considered as there are just £4.3m of tax losses to be used in 2009 – and they will run out in 2010. Another factor is that the rate of growth will slow from the astonishing 65 per cent, but it still looks as if it should be substantial, especially in relation to the low PE ratio. I find it hard to understand why a company such as EDD in a business so well suited to today's difficult conditions, growing very fast and generating plenty of cash, should be on such a low prospective multiple.

Does anyone have a link to the Brewin Dolphin forecast?

[hectorp] 23/3/2009 11:33

Tipped by Slater in the IC... along with AMS and LCG. THey are his 3 big AIM tips for this year. Of course he already holds loads of these.

[cockneyrebel] 22/3/2009 11:44

Yep good point protean. I follow the zulu principle but where Slater likes strong RSI I like to see a chart trend that is going upwards to be buying on - perhaps that should be the additional rule. Personally I use a mixed approach. I'm willing to buy stocks making breakouts simple because they are making break outs but I'm not happy holding them longer term simply because you can't have the confidence to hold if you don't understand the business or the reason for the rise.

Zulu Principle is based on good knowledge, reasoning and a good valuation basis. Of course if you get both a breakout and a Zulu based investment that's the best of all worlds, breakouts being quite common in zulu's. EDD certainly looks like a cracker on all fronts and you'll struugle to find a better chart than this one. What's it going to do when the market gets a bit more confidence back?

With pre-tax doubling this year there's no way that next years pre-tax will rise just 5% as forecast, not with the acquisitions and the growth in unemployment re-training, in fact I bet EDD beat next years forecast this year as far as pbt goes and even after paying 28% tax next year rather than the 10% this year they will do 10p+ eps without any problem imo - big upgrades at the results imo simply because next years forecasts have been held back until brokers see the interims at least imo.

CR

[interceptor2] 22/3/2009 10:04

I think since the first Zulu Principle was issued, Jim Slater does pay more attention to technicals. One of his mandatory critera is for relative strength in the previous 12 month's. But as with anything it is best to add your own or other peoples successful approach to your own. Robbie Burns uses technicals very well for stock selection, and most of his buys are on a price break out, and uses technical analayst to set s/l or price targets. I find both Jim Slater fundamentals and Robbie Burns technical approach do complement each other.

So in conclusion I would agree that it would be best to identify shares for the watchlist using the zulu approach, but then wait for the right time to enter using technicals

[protean] 22/3/2009 09:06

interceptor2 - no probs with the link. Yes, the Zulu Principle is certainly a good way of picking shares and helps you buy growth companies which are undervalued by the market.

This works best in a bull market imo, but with a bear market general market sentiment drags down the majority of shares and should be taken into consideration. EDD seems to be bucking the trend and making new highs even though the market has fallen steeply over the past year. This is a particularly strong sign.

My primary reason for buying is always technical and I will only go long if a share is trending upwards already. EDD is clearly doing this so I'm happy to be long. If a share is moving sideways or downwards but is on a low PEG, I wouldn't want to be in it until the price is moving on an upwards tack again. Livermore puts this excellently in his How to Trade in Stocks as:

'Don't back your judgement "UNTIL THE ACTION OF THE MARKET ITSELF CONFIRMS YOUR OPINION"'

Take AMS for example, another Slater recommendation. If you'd bought into this last April with a view that it's a good growth stock with a low PEG, you'd just about have broken even. I'd much rather wait until this makes a new high above 37 since this would mean that the trend is upwards again. After all, time is money.

So yes, I think the Zulu Principle is excellent. But over time I've discovered that it's essential to pay attention to price action as well. It's one thing finding an undervalued share, but unless others agree and buy in (and this is reflected in price) it's impossible to make money when the shares move sideways or downwards (unless you're short of course!).

[interceptor2] 21/3/2009 18:39

protean - just listerned to Jim Slater podcast interview, very interesting and thanks for posting.I have always used his Zulu Principle for chosing shares, hence that is why I'm in EDD. The big advantage that us smaller investors enjoy is that we can buy into these smaller companies fairly easy, but someone like Jim Slater would need to wait for a large seller to appear to get a worthwhile holding. He was proberly been waiting for sometime with EDD, but until W Dore starting selling he was just unable to buy enough. For 2008 I had been sidelined with small caps after selling out the year before, I have started buying in again this year, and alot of smaller companies do seem to be breaking upwards on strong results, as long as the balance sheet is strong. Like CR. I do trade at home rather than work, so a recovery would welcome soon. But having said that I think if you stick with the Zulu Principle, even last year you would have been ok.

[cockneyrebel] 21/3/2009 17:09

Completely agree - some huge rallies coming.

TPK interesting as it stuck it's nose through the intraday high and closed just above the Jan closing high.

CR

[protean] 21/3/2009 17:05

My approach is mostly technical rather than fundamental CR, although interestingly I'm seeing the same sort of things from a different perspective. So generally where you're seeing a battered valuation in a good growth stock, I'm seeing a chart where the price has fallen significantly before bottoming out.

Both ways the upside potential appears to be large. And it's definitely interesting that although the general index is still heavily down, an increasing number of stocks seem to be ahead of the curve and starting to trend upwards after a long period in the doldrums.

The rapidity of some of the upward moves of oversold stocks so far is impressive like CIU, OFF, TLPR, BBAY, VPC, LVD, GOAL, RGU etc. and if this is any indication of what we can expect when the bull market finally starts, then there's going to be a lot of potential ahead.

All we need now is for the index to flatten out for a bit and then start turning up in earnest.

[cockneyrebel] 21/3/2009 14:56

yep, I think that's right too protean. BLVN this week, trading at 35p and a cash bid comes in, out of the blue @ 150p! Shows how undervalued some things are imo.

I have a theory that the spring weather helps - humour me for a minute :-) Market bottoms invariably happen often in March - I think that's a point when human psychology changes, the weather gets better, days are longer and we gt happier and more optimistic. The reverse happens in October when market often tank.

I think when the US indicies recently went through the major lows to make the new recent lows it was a timing thing, the indices were weak and at that point all those that had held on hoping that those major lows would hold were disappointed and sold out - a capitulaton. I have to say I thought at that point I might as well start working again instead of investing cos it was an easier way to make money. Fortunately I thought about it again and came to the conclusion that if I felt like that most others must feel like it too and that that might be the point to go in a bit heavier.

Interestingly I noticed a lot of stocks making breakouts on Friday, NXT, DNX, MKS, TPK and EDD here to name a few. I also feel the bb's are starting to see value hunting again.

Look at CIU last week - doubled from Weds close after the results, RGU up 30% on the results - goes to show how undervalued many of these things are.

I've been buying a lot of stocks with high yields and low PE's where the divi is still being raised. OFF - isa-able, 7.5p divi is yours if you hold at the close on April 7th (two weeks time) and 11p+ divi next year so an 18% yield over 54 weeks. Forecast to grow earning 25-30%, PE 4 - that's even after the recent rise. WSH is another one - raised the final divi 25% to 10p to holders at the close on March 31, pays at least 25p divi over 53 weeks (12%+) and on a PE of 4.5 even after the recent rise. Directors buying at both these two recently.

Some absolute give aways in this market that won't be that cheap for much longer imo.

CR

[bookworm1] 21/3/2009 14:42

The IC have been running a feature written by Jim Slater offering his investment approach. Last week he set out a general strategy and this week he wrote about three small cap favourites which included EDD.

Although there are many on-line training providers what makes EDD different is that it is an accredited assessor. It main competitors are more like Edexcel, AqA and OCR.