Online Education Stocks Are Taking Off In July, Are They On Your List?
Education technology or online education stocks are one of the hottest areas to look at this year. This came as the necessity of online education became more pronounced amid the pandemic. With the jump in coronavirus cases across the globe, the economic landscape is very different right now. The world we live in today involves a much greater focus on technology than on traditional brick and mortar. While many states in the U.S. are still debating on whether it is safe for children to return to schools, online education stocks have been gaining some attention lately. For this reason, investors are starting to look for the best online education stocks to buy right now.
Over the past decade, the education industry has been trying ways to incorporate technology into the education system. And because of that, students today no longer need to hand in their homework on a piece of paper. They can just upload their homework online. More interestingly, students could learn any subject through 3D immersion and even learn to code online. And all these are made viable thanks to educational technologies. The shutting down of schools and colleges during the crisis showed how learning can still take place in the form of e-learning.
With the increasing student loan debt weighing down American consumers, graduates are starting to realize that a degree from traditional institutions isn’t as valuable as it once was. Not only will it take a lifetime for many to pay off, many see the disparity in the skill set that society needs in comparison to what the schools offer. So if this sector is of your interest, bear in mind that the online education sector can be quite speculative at this stage. And that translates to a higher risk. But there’s something investors should also take note of. It is that a bit of reopening optimism can make the market forget all about the stay at home tech and refocus on traditional brick and mortar niches. Do greater risks imply greater rewards when it comes to online education stocks?
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Online Education Stocks To Buy [Or Sell]: Houghton Mifflin Harcourt
Shares of Houghton Mifflin Harcourt (HMHC Stock Report) soared 32% on Thursday. At one point, it was up a whopping 60%. The surge in HMHC stock came after it said it’s launching a new online education tool for teachers, just in time for the new school year. The product, also known as Teacher’s Corner, will provide educators the tools to improve their skills. The product includes video series from other teachers and live coaching events. There is also a place for educators to connect with one another. This couldn’t come in at a more appropriate time. After all, the plan for education this fall is still up in the air. It is possible that the coronavirus outbreak continues to spread at today’s rate. In that case, schools around the country may have to switch to online education. Shall that really happen, Teacher’s Corner is a timely offering?
The platform helps in preparing for a lesson and picking up best practices for remote instruction. Teachers can listen to a short podcast from a fellow teacher and obtain trusted resources that empower educators. With online teaching likely to become the norm in the foreseeable future, HMHC stock could actually be a good value buy.
But if we look at the performance of HMHC stock for the year 2020, the stock is currently down 61%. My concern is, when a stock pops this much on such news, there’s a great chance many of the buyers don’t intend to hold their shares in the long run.
Online Education Stocks To Buy [Or Sell]: Chegg
Chegg (CHGG Stock Report) has become one of the best online education stocks during the Covid-19 pandemic. Shares of CHGG are up almost 90% year to date. Many people first learned of Chegg when they rented textbooks to avoid having to pay for expensive textbooks. But the company is now making its mark with direct-to-student learning. The company began textbook rental in 2007. But it has since transitioned to offering a full suite of services. These are mostly for college and high school students, and to a lower extent for middle school students as well.
Among the services provided are online classes, tutoring, video problem-solving, error and plagiarism check software, as well as study materials on virtually any subject. The pandemic has forced millions of students at all levels to adapt to an alternative way of receiving an education. The one-on-one assistance provided by Chegg was one of the services that enabled students to adapt to this new reality. In fact, students were already moving toward online learning through Chegg in greater numbers before schools were required to change over to online education.
You would have seen the stronger trading interests in CHGG stock in recent months compared to at the start of the year. Now that CHGG stock is trading near its all-time highs, does CHGG stock have enough momentum to continue the rally?