Apollo Group (APOL), Rosetta Stone (RST) Among Ariel Investments’ Top Picks

Rosetta Stone Inc (NYSE:RST) is one of the leading service providers for technology-based language learning companies. Rosetta saw Ariel up its stake 80% last quarter. Rosetta sells a number of various audio practice tools, and operates in a relatively niche market. The company trades on the low end at a P/S below 1.0X, especially compared to Nuance Communications (3.7x) and McGraw Hill (2x). We like the prospects of Rosetta stone given a rebound in consumer spending. Rosetta Stone had little fund interest last quarter, with billionaire Jim Simons being one of the only top-name shareholders (check out Jim Simons’ favorite picks).

International Speedway Corporation (NASDAQ:ISCA) saw Ariel up its stake by close to 70% last quarter. The underlying bullish thesis behind International Speedway lies in the consumer and leisure segment of the economy. Wall Street expects the company to grow its bottom line by 7-8% over the next half-decade, which is relatively low when coupled with the stock’s expensive 23x P/E. Although International is one of the leading raceway companies it is a bit rich at 2.8x sales, whereas Speedway is at 1.3x and Churchill Downs is at 1.7x. A number of billionaire investors were selling off shares of International last quarter, including Ken Griffin, Jim Simons and Israel Englander (check out Israel Englander’s bullish bets).

It appears that Ariel is making some big investments in industries that rely on consumer spending. We believe that Ariel is betting on a rebounding economy, and its leisure-related bets tie into various industries from casinos to raceways. For more coverage of the stocks mentioned in this article, continue reading below:

Ariel Revs its engine in International Speedway

Check out our Western Union’s previous analysis

Billionaire Chase Coleman sold out of Apollo and others