The three months ended June 2008 have not been the best for any stock exchange. The S&P 500 has lost a hefty 8 percent during this brief interlude. The services sector has declined by a similar amount as well. However, one of its members has bucked the trend. The schools industry has registered a sharp rise in the last 100 days. Is this the beginning of a new trend? This would be welcome news for investors wary of market volatility.
Education is good business. It matches health care in social significance. Education is also a great leveler. It is the best hope for children from economically depressed communities. State-sponsored educational facilities do not meet all demands. This has spawned a robust industry for teaching in a business format.
There are some 26 listings from the schools industry in various stock exchanges. Small-capital stock options dominate the scene. This suggests that the industry is nascent. The need for quality education will rise with population growth. That is why the future prospects of this industry are amongst the best available for stock investors. It is not uncommon to find Price to Earnings Ratios of less than 20 in this industry.
Corporations that offer specialized educational courses make for top stock picks. Such enterprises enjoy relative price insensitivities. This makes Gross Margins durable, with excellent dividend prospects for investors. Continuing and distance education formats leverage fixed costs fully. Clearly, multi-media Internet is set to make a bright star of the schools industry.
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