5 Best Education Stocks To Buy In 2023

In this article, we discuss 5 best education stocks to buy in 2023. If you want to see more stocks in this selection, check out 10 Best Education Stocks To Buy In 2023. 

5. Laureate Education, Inc. (NASDAQ:LAUR)

Number of Hedge Fund Holders: 27

Laureate Education, Inc. (NASDAQ:LAUR) provides educational services and programs to students by collaborating with a network of universities and higher education institutions. The company offers undergraduate and graduate degree programs in fields such as business and management, medicine and health sciences, and engineering and information technology. In Q4 2022, Laureate Education, Inc. (NASDAQ:LAUR) reported that its revenue increased 16.7% year-over-year to $346.3 million, beating market estimates by $12.9 million. In 2023, the company expects total enrollments to be in the range of 447,000 to 455,000 students, reflecting growth of 6% to 7% versus 2022. It is one of the best education stocks to buy this year. 

According to Insider Monkey’s fourth quarter database, 27 hedge funds were long Laureate Education, Inc. (NASDAQ:LAUR), compared to 17 funds in the last quarter. Peter S. Park’s Park West Asset Management is the largest stakeholder of the company, with 4 million shares worth $38.5 million. 

Here is what Clark Street Value has to say about Laureate Education, Inc. (NASDAQ:LAUR) in its Q4 2021 investor letter:

“Another informal liquidation, Laureate Education (LAUR), has mostly worked out to plan, the sale of Walden University closed and they’ve since paid out $7.59/share in special dividends.  They’ve also collapsed the dual share structure.  It is now a purer play on Mexico and Peru, my best guess is this is not the end state and we’ll see a final sale of the remaining assets once covid subsides and/or the political climate in Latin America improves.  Most of my exposure rolled off earlier in December when my calls expired, now just hanging onto a smallish position to see how the rest plays out.”

4. TAL Education Group (NYSE:TAL)

Number of Hedge Fund Holders: 28

TAL Education Group (NYSE:TAL) specializes in after-school tutoring services for K-12 education in China. The company provides a range of academic tutoring services to K-12 pupils, encompassing subjects such as mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. It is one of the premier education stocks to invest in. 

In late December, Linda Huang, an analyst at Macquarie, observed that the Chinese Ministry of Education and twelve other departments have jointly issued new guidelines for the non-academic tutoring industry, which include more stringent and detailed requirements for course fees, tutor qualifications, teaching time, and inspection of operations. These guidelines were issued in addition to the guidelines for non-academic tutoring institutions that were issued in March 2022. Huang noted that the after-school tutoring companies she covered complied with these rules, but she acknowledged that the market sentiment may be affected in the short term, leading to profit-taking pressures since these companies’ share prices surged more than 50% in the past two months. Despite this, Huang maintained an Outperform rating on TAL Education Group (NYSE:TAL) and suggested that investors reconsider after the market correction, given that the company is compliant with government regulations and has the potential to consolidate the market.

According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on TAL Education Group (NYSE:TAL), compared to 20 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 4.4 million shares worth over $31 million. 

Here is what Tao Value has to say about TAL Education Group (NYSE:TAL) in its Q4 2021 investor letter:

“Looking at the value destruction, TAL Education (TAL) is one of the most painful losses. Although the company is part of the “Mindful Compounder” bucket, it impaired by 95%. If anything, it is a heavy price paid for learning that stock returns are driven by more than business and market factors, but also societal factors. I personally think having 4 out of the 5 top value destructions being recently started positions in Chinese stocks is a bit biased, as the market may have overreacted the most to anything China-related recently.”

3. Graham Holdings Company (NYSE:GHC)

Number of Hedge Fund Holders: 29

Graham Holdings Company (NYSE:GHC) is a diversified education and media corporation that offers various services through its subsidiaries. These services include test preparation, professional training and exam preparation, non-academic support for Purdue University Global, online course and program support, financial and accounting training and test preparation, English-language training and proficiency exam preparation, A-level examination preparation, and operation of colleges, a business school, a higher education institution, and an online learning institution. Graham Holdings Company (NYSE:GHC) is one of the top education stocks to invest in. 

On February 23, Graham Holdings (NYSE:GHC) declared a $1.65 per share quarterly dividend, in line with previous. The dividend is payable on May 11, to shareholders of record on April 20. Additionally, the company’s Q4 revenue of $1.06 billion climbed 22.8% year-over-year, beating Wall Street estimates by $10 million.

According to Insider Monkey’s fourth quarter database, 29 hedge funds were bullish on Graham Holdings Company (NYSE:GHC), compared to 23 funds in the prior quarter. Madison Avenue Partners is the biggest stakeholder of the company, with 200,384 shares worth $121 million. 

Here is what Heartland Mid Cap Value Fund has to say about Graham Holdings Company (NYSE:GHC) in its Q4 2022 investor letter:

“Volatility in the fourth quarter allowed us to add what we consider a best-in-class holding in communications. Graham Holdings Company (NYSE:GHC) spun Cable One, Inc.  (NYSE:CABO) out in 2015, and investors became attracted to management’s strategy to exit pay TV, which has been in secular decline amid the streaming boom, in favor of more-profitable broadband.”

2. Chegg, Inc. (NYSE:CHGG)

Number of Hedge Fund Holders: 33

Chegg, Inc. (NYSE:CHGG) provides a direct-to-student learning platform that offers products and services to support students in their academic journey and career development. The company’s Chegg Services include subscription services, such as Chegg Study, Chegg Writing, and Chegg Math, which help students master challenging concepts and solve math problems. The company also offers skills and other services, including advertising, print, and eTextbooks. On February 24, Chegg, Inc. (NYSE:CHGG) entered into an expedited share repurchase agreement to buy back $150 million worth of its own common stock, which is a component of its $2 billion securities repurchase initiative.

On February 7, BMO Capital analyst Jeffrey Silber decreased Chegg, Inc. (NYSE:CHGG)’s target price from $30 to $20 and maintained a Market Perform rating on the shares. Although the company’s Q4 earnings surpassed projections, the analyst believes that the initial 2023 outlook is unsatisfactory due to persisting “macro challenges,” such as decreased higher education enrollment, a robust job market, and inflation. Nonetheless, Chegg, Inc. (NYSE:CHGG) management is optimistic about ending the year in a stronger position than it began, the analyst told investors. 

According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on Chegg, Inc. (NYSE:CHGG), compared to 28 funds in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 2.5 million shares worth $63.6 million.

Here is what Artisan Mid Cap Fund has to say about Chegg, Inc. (NYSE:CHGG) in its Q4 2021 investor letter:

“Short-term market dynamics aside, we did experience several disappointing profit cycle developments during the quarter, Chegg and Roku in particular. Chegg is a digital education platform. A pattern of steady long-term growth in US subscribers surprisingly came to an end when it reported Q3 results. This precipitated a sharp decline in the company’s valuation and our estimate of its private market value (PMV). Management cited factors such as fewer enrollees in 2-year colleges (lured into the workforce by higher wages) and less need for study aides as COVID-related pressures have resulted in students taking less-challenging courses and professors assigning lighter workloads. We view these explanations as mostly logical, but we also believe US penetration of the company’s services has become relatively mature. These headwinds could persist for at least the next few quarters, and we are currently evaluating whether other long-term growth drivers—international subscriber growth, new services—remain intact. Meanwhile, it represents a very small GardenSM position in our portfolio.”

1. New Oriental Education & Technology Group Inc. (NYSE:EDU)

Number of Hedge Fund Holders: 36

New Oriental Education & Technology Group Inc. (NYSE:EDU) offers private educational services under the New Oriental brand in China. The company is divided into several segments, including Educational Services and Test Preparation Courses, Online Education and Other Services, Overseas Study Consulting Services, and Others. It is one of the best education stocks to invest in. 

On January 17, New Oriental Education & Technology Group Inc. (NYSE:EDU) reported a Q2 non-GAAP EPADS of $0.10 and a revenue of $638.2 million, outperforming Wall Street estimates by $0.01 and $24.04 million, respectively. New Oriental Education & Technology Group Inc. (NYSE:EDU) anticipates that its total net revenue for the third quarter of fiscal year 2023 will fall between $702.8 million and $719.8 million. This projection is higher than the consensus estimate of $672.36 million and reflects a year-over-year growth rate ranging from 14% to 17%.

According to Insider Monkey’s fourth quarter database, 36 hedge funds were bullish on New Oriental Education & Technology Group Inc. (NYSE:EDU), compared to 29 funds in the previous quarter. Fang Zheng’s Keywise Capital Management holds nearly 4 million shares in the company and is the largest stakeholder of New Oriental. 

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