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Studying these 3 education stocks now could pay off big time

The education sector is poised to experience explosive growth over the medium to long-term, and if these 3 players can get the formula right, they will get an A+ grading from investors in the future.

Navitas Limited (ASX: NVT)

Navitas Limited is an education services provider operating across the globe, with a range of educational and training services for students and professionals.

Navitas has had some share price volatility over the last 12 months – rising to highs of $5.59 through December 2017 to drop back to a May 15 close of $4.34, not far off its share price of $4.54 at this time last year.

Navitas last month announced growth of 3% in its student enrolments in its university partnership division with its biggest enrolments coming out of the UK – where numbers increased by 6% on the previous corresponding period drive by more European Union students seeking to study in the UK.

Navitas is yet to crack the challenging US market, but its growth strategy includes a continued push for better US market share while operations across Australia and New Zealand continue to grow and presence in Asia and Africa is also plodding along slowly.

If Navitas can get a firmer handle on its global reach by continuing to forge mutually-beneficial partnerships things should rev up pretty swiftly for the company as its fundamentals look fairly strong and its motivations certainly appear to be in the right place.

Idp Education Ltd (ASX: IEL)

Shares in international student placement services company Idp Education Ltd are at a 52-week high, sitting up 85% at $8.61 from $4.60 at this time last year.

Goldman Sachs downgraded the stock from a  buy rating to a neutral earlier this month, which saw a short-lived tumble for the stock, but investors still seem buoyed by favourable first-half results including a revenue increase of 27% to $242 million and NPAT up 27% to $30.5 million.

Idp has recently partnered with professional services company Cognizant to build a global platform to digitally support students – announced by Cognizant as a “platform to connect and empower students” across 30 countries.

Idp’s services already work to assist students to match with the right course and institution and operates 11 English teaching campuses across South East Asia – a known growth market in the education sphere.

Idp appears to have some big things on the horizon, but plenty of work to do building partnerships to see them come to fruition.

Definitely one to watch.

G8 Education Ltd (ASX: GEM)

Shares in G8 Education have seen some signs of recovery lately after spending the best part of 2018 on the declines, dropping back from a late 2017 high of $4.42 to an April 27 low of $2.18.

G8 Education shares are back down 0.4% to $2.48 at the time of writing, but experienced a surge back upwards during early May after the release of a presentation to the market as part of the Macquarie Group Ltd (ASX: MQG) conference.

G8 is now Australia’s largest early education provider, with 500 centres across the country and resilient operating performance in a competitive market.

The company has 40 centres in the pipeline in the next 2 years a focus on re-engineering marketing to attract more customers to existing centres and investment in greenfield and brownfield centres also a key focus.

G8 has suffered through regulatory changes this year that saw the company grapple with vacancy issues, but second-half earnings are expected to be positively impacted by the Government’s new funding package for childcare and investors will be on the lookout for how G8 can best leverage the situation.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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