This week’s trade comes from the education publishing sector of NASDAQ. Key take-a-ways vvare the impressive ROE at 15%, the increasing buying pressure and the breakout after three years of consolidation.
Pearson plc provides educational products and services to institutions, governments, professional bodies, and individual learners worldwide. The company operates through three segments: North America, Core, and Growth. It offers courseware services, including curriculum materials provided in book form and/or via access to digital content; and assessments, such as test development, processing, and scoring services. The company also operates schools, colleges, and universities; and English language teaching centers, as well as provides online learning services in partnership with universities and other academic institutions. In addition, it sells books; delivers and installs off -the-shelf software; and provides services to academic institutions, such as program development, student acquisition, education technology, and student support services, as well as undertakes contracts to process qualifying tests for individual professions and government departments under multi-year contractual arrangements. The company was founded in 1844 and is headquartered in London, the United Kingdom.
Trailing P/E: 12.97
EPS: 1.01, P/S: 1.81, P/B: 1.90
Beta: 0.33, Profit margin: 14.11%, Operating margin: 8.59%
ROA: 2.82%, ROE: 15.21%
Gross profit: 2.45 billion
Current ratio: 1.46
Additional fundamental data: https://finance.yahoo.com/quote/PSO/key-statistics?p=PSO
Recently broke out of a 9-month consolidation
New 52-week high, new 3-year high
Buying momentum (RSI) is positive and rising
Buying volume is neutral, 1st support level is $12.50
Safety stop level is at $12.48
The target is $14.95
Suggested buying approach: Buy PSO at the current price level. If the stock pulls back, as long as the level is above the safety stop, wait for confirmation of support and then add to the position if desired. Always use a 3% trailing stop.
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