The Australian post-school education sector is changing. Proposed laws by the Abbott government will likely push university fees up further for some courses and it appears that Australians are becoming savvier about what education to pursue.
In the ever present quest for value for money, education seekers and employers appear to be searching for short courses or targeted training in a particular area of competence, rather than a Masters in a broader field for example. This is my observation amongst my peer group and has some interesting implications for investment ideas.
The Losers
If the shift to short courses is in fact a permanent trend, universities and larger private organisations could be the losers, while smaller, more focussed operators and TAFEs could benefit.
The Winners
More importantly, there are a few listed companies that could be big winners if this trend takes hold. Recently listed companies Vocation Ltd (ASX: VET) and Intueri Education Group Ltd (ASX: IQE) offer companies and individuals vocational education (also called career and technical education) in Australia and New Zealand respectively.
These courses are generally shorter and cheaper than university courses and get workers either earning money or earning more money faster. Vocation has three divisions: Enterprise, Direct, and Solutions. As is obvious from their names, the Enterprise side of things provides customised workforce-based training, the Direct business provides training to individual students, and the Solutions business works with other education providers to improve their offerings.
Intueri is similar, and is the largest provider of vocational education in New Zealand and also provides online courses to Australia. Intueri invests in the education establishments and has five schools that focus on education to the following industries: Design and Arts, Beauty and Spa Therapy, Culinary Design and Hospitality Management, Business and Computing, Hotel & Tourism Management, Professional Counselling, Hairdressing, Make Up Artistry and Commercial Diver Training. These are large and growing sectors and should remain resilient through most economic conditions. This suggests Intueri could be an excellent long-term investment.
