Should You Consider New Oriental Education (EDU) as a Good Investment Option?

Davis Funds, an investment management firm, published its “Davis International Fund” fourth quarter 2020 investor letter – a copy of which can be downloaded here.  A return of 22.69% was recorded by the fund for the year end of 2020, outperforming its MSCI ACWI benchmark that delivered a 10.65% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Davis International Fund, in their Q4 2020 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-based private educational services provider that currently has a $25.1 billion market capitalization. Since the beginning of the year, EDU delivered a -20.67% return, while its 12-month gains are still up by 30.98%. As of April 06, 2021, the stock closed at $14.74 per share.

Here is what Davis International Fund has to say about New Oriental Education & Technology Group Inc. in their Q4 2020 investor letter:

“Historically, the Chinese government has focused on market reforms in one or two sectors, which can be disruptive in the short term. In the past, government regulations have focused on sectors such as live video streaming in 2016, for-profit education in 2018 and video games and online video in 2019. It was disruptive when New Oriental Education & Tech had to ensure 100% of its after-school teachers had teaching degrees. But these reforms had little impact on these businesses’ long-term value, and in the end, it created a more sustainable business environment.”

Eiko Tsuchiya/

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 -14.38% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.