Rosetta Stone Inc (RST), 3D Systems Corporation (DDD) & Stratasys, Ltd. (SSYS): 3 Alternative Perspectives for Investing in the Education Sector

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Often when people consider investing in the education sector, they primarily turn to for-profit education companies– Apollo Group Inc (NASDAQ:APOL), DeVry Inc. (NYSE:DV), and Strayer Education Inc (NASDAQ:STRA), to name a few. However, investors would benefit from turning their attention to a less-obvious aspect of the sector– the trends that are developing in the elementary and secondary schools.

One of the driving forces behind these trends is the U.S. Department of Education program, Race to the Top. This program requires states to meet certain criteria in order to receive federal funding. Additionally, it has inspired the development of the Common Core Learning Standards, which aims to bring the learning standards of individual states into alignment.

Learning a new language

Rosetta Stone Inc

One aspect of the Common Core standards, which is of great concern to educators, is the education of non-native English speaking students, or English Language Learners (ELL). Students, under Common Core, are held to the same standards as native English speakers. This is where Rosetta Stone Inc (NYSE:RST) can greatly benefit. “Delivering the best technology-based solutions for language learners”– Rosetta Stone Inc (NYSE:RST)’s mission statement is clear, and it addresses the needs of school districts. According to its website, Rosetta Stone Inc (NYSE:RST) claims that over 20,000 school districts have incorporated its solutions into their curricula. Rosetta Stone’s TOTALe Pro solution offers schools a program, which provides students with a more natural method of learning English—one more focused on conversation skills and less focused on formal grammar instruction.

School districts, like most other institutions, are facing increasing strains on their budgets. As districts increasingly decide to cut costs by reducing personnel, Rosetta Stone Inc (NYSE:RST) offers school districts a cost-effective solution that doesn’t compromise instructional delivery.

Although free websites such as provide a threat to Rosetta Stone, the company demonstrated its willingness to reduce some of these threats when it acquired Livemocha for $8.5 million cash. Rosetta Stone Inc (NYSE:RST)’s President and Chief Executive Officer, Steven Swad, said that, “We are in the process of transforming Rosetta Stone to be the most dynamic and ubiquitous technology-based learning platform in the world. . . Livemocha will help accelerate that transformation.”

Not your parents’ science and math class

Regarding curriculum, one area in which educators and politicians are increasingly focusing on is Science Technology Engineering and Mathematics (STEM) education– an area in which 3D printing is inextricably linked.

Although many school districts may balk at making a substantial investment in something like a 3-D printer, the price tags for these machines have been steadily declining, making it much more feasible for schools to purchase them. For example, 3D Systems Corporation (NYSE:DDD). recently made their Cube 3D printer available to Staples, Inc. (NASDAQ:SPLS) customers for $1,300 – quite reasonable when one sees that Staples, Inc. (NASDAQ:SPLS) offers several LaserJet printers for $6,000. Proving that the prices are not an inhibiting factor, the websites of 3D Systems and competitor Stratasys, Ltd. (NASDAQ:SSYS) present a number of case studies that showcase the use of 3-D printers in high schools and colleges.

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