Polen Capital, an investment management firm, published its “Polen International Growth” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of -1.14% was delivered by the fund for the Q1 of 2021, trailing its MSCI All Country World benchmark that delivered a 3.49% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Polen International Growth Fund, in its Q1 2021 investor letter, mentioned New Oriental Education & Technology Group Inc. (NYSE: EDU), and shared their insights on the company. New Oriental Education & Technology Group Inc. is a Haidian District, Beijing, China-based private educational services provider that currently has a $23.3 billion market capitalization. Since the beginning of the year, EDU delivered a -34.34% return, while its 12-month gains are up by 3.76%. As of May 14, 2021, the stock closed at $12.20 per share.
Here is what Polen International Growth Fund has to say about New Oriental Education & Technology Group Inc. in its Q1 2021 investor letter:
“New Oriental Education shares declined in the quarter, seemingly on account of two notable drivers. First, Chinese online education is currently under a regulatory microscope, although the online tutoring area is not central to New Oriental’s business. We continue to believe that, as a large player in a highly fragmented market, New Oriental is well-positioned to manage regulatory change and offers regulators an easier touchpoint to regulate and monitor than individual mom & pop operators.
As regulatory fears hit the after-school tutoring market, we think New Oriental, a leading player in brick-and-mortar after-school tutoring, could gain strength. We think the long-term backdrop for after-school tutoring remains quite favorable. Significant scale advantages and a highly cash generative model with just approximately 5% market share indicate that New Oriental has potential to grow at a high rate, in our opinion. Further, movements by another investor in New Oriental in late March 2021 prompted indiscriminate selling of shares. Those sales left shares trading at a compelling valuation, in our opinion, so we acted by adding to our position. We think New Oriental remains poised to grow earnings at approximately 25% annual rate in the coming years.”
Our calculations show that New Oriental Education & Technology Group Inc. (NYSE: EDU) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, New Oriental Education & Technology Group Inc. was in 43 hedge fund portfolios, compared to 40 funds in the third quarter. EDU delivered a -37.71% return in the past 3 months.
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