One of the biggest byproducts from the coronavirus pandemic is various lockdown measures around the world.
Millions have been forced to stay in their homes and have limited contact with others to prevent the spread of the virus.
Retail stores, bars and restaurants closed, and traffic on the streets was minimal.
While those closures have attracted a lot of headlines, there’s one sector impacted by the COVID-19 pandemic you don’t hear a lot about.
And the transformation of this sector to deal with the outbreak provides a great investment opportunity.
And using Money & Markets Chief Investment Strategist Adam O’Dell’s proprietary stock rating system, you’re going to learn about a company with great potential.
Education Stocks: Changing the Learning Curve
The sector that’s seen big changes because of the pandemic is education stocks.
According to UNESCO, more than 1.3 billion students were moved out of their classrooms as schools around the world closed.
This includes college students, who were sent home by the millions.
But rather than give students a long snow day, schools began transforming how classes were delivered by moving them online.
The transition isn’t easy. It requires moving course material like tests and lectures to an online platform.
That takes time and money.
One solution for students was to enroll in schools with an established foundation for online learning. No waiting for others to catch up to the technology when there are accredited schools out there that have already implemented it.
Even before COVID-19, investment in online education was growing at a rapid pace.
According to the World Economic Council, global education technology investments hit $18.6 billion in 2019. By 2025, that figure will be around $350 billion.
The Online Learning Experience
For the last four years, I have taught college-level communications for a school based in New York.
It’s been a great experience to learn about new people and teach some of the practical things I’ve learned over the years.
But I’ve noticed a big trend lately that got me thinking.
The number of students enrolling in my class has taken off. A lot of them are adult students returning to school to pick up a new skill, or finish what they started years ago.
Diving deeper, I can see this trend growing as millions of Americans continue to be out of work.
In fact, Shark Tank star and Dallas Mavericks owner Mark Cuban said the millions of Americans out of work should prepare for this question at their next job interview:
“What did you learn during the pandemic of 2020?” Cuban said during a recent interview on a Dallas CBS affiliate.
A lot of people will look to colleges to learn a new skill set for either a new job or a better career. So it’s a good time to take a look at education stocks.
Now I’m going to share with you one company set up for big gains as online education continues to take off.
This Established Online School Is a Winner
M&M Chief Investment Strategist Adam O’Dell
Using Adam’s proprietary rating system, we found Aspen Group Inc. (Nasdaq: ASPU). It’s a small company with a market cap of just $190 million at present. And its stock trades with low volatility.
It was founded in 1987 and provides online higher education services in the U.S. It offers certificate programs and associate, bachelor’s, master’s and doctoral degree programs in a wide range of areas.
Of note: The company recently joined the small-cap Russell 2000 index and the broad-market Russell 3000 — illustrating its solid financial performance as a standout education stock.
Here’s what we found:
- Volatility — ASPU has a beta of 0.74. Beta measures a stock’s volatility in relation to the overall market. Any beta under 1 is considered to be low risk. The stock has also generated high risk-adjusted returns, meaning it has handed investors good profits with only mild volatility.
- Size — Being a smaller, lesser-known company, Aspen’s stock trades with less liquidity than a well-known, mega-cap stock like Facebook Inc. (Nasdaq: FB). And Adam knows the “size” factor can help you find market-beating gains in smaller companies whose stocks trade with less liquidity. ASPU ranks high on the size factor.
Our Takeaway
Adam’s system has identified Aspen Group Inc. as a small, promising company with below-average volatility and risk.
It can invest more in online education technology to serve a broad student base.
Aspen Group is positioned to capitalize on the influx of students as more Americans look to online schools to complete or further their education
We think this shift in online education is going to pay great dividends for investors who get into the education stocks trend early.
Aspen Group is a great way to do just that.