Investors Betting on More School Lockdowns, Education Stocks See Boost
Fears of second lockdowns are triggering education stocks, looks like opportunity does come knocking twice.
- Nationwide lockdown headlines and school closures give education/communication stocks momentum.
- Some school districts have already switched back to online learning due to COVID case growth and high levels of hospitalizations due to the virus.
- Boxlight develops, sells, and services its integrated solution suite including interactive displays, collaboration software, supporting accessories, and professional services.
As it turns out, we're not invincible. Despite strong preventative measures in this country, we are experiencing thousands of coronavirus cases. Wednesday brought the United States' highest one-day infection total (above 143,000) and seven-day average for new daily infections (more than 127,000) on record, according to Johns Hopkins University data. Talks of a second nationwide lock down are being considered amongst states, such as California. Am I scaring you? Don't worry, you can hide in your brand new Lamborghini after this is over.
The education and communication sector is an intriguing play, as kids across the nation will probably be sent back home. Parents can't really catch a break, they still have to deal with their damn kids for a few more months. Colleges will most likely employ this leading into thanksgiving, giving students plenty of time to infect, I mean, return to the family home. They gotta learn somehow, right? I present to you a shitty penny stock that will merely be a trade, Boxlight Corporation.
Boxlight Corporation (BOXL) is a leading provider of interactive technology solutions with brands such as: Clevertouch, Mimio and Sedao. The company focuses its efforts on improving communication and engagement in business and education environments. The company's shares have gained 49.5% year to date against the 4.5% decline of the industry it belongs to. Since 2016, the company has made nine acquisitions which underperformed management expectation. Recently, Boxlight signed a new acquisition to acquire Sahara Presentation Systems in a deal worth $94.9 million. They are a United Kingdom based company that do better in the UK and Europe than anywhere else in the world.
What good does that do?
Michael Pope, chairman and CEO, stated that this acquisition adds global management talent to the company and expands its geographic footprint, especially in Europe and the UK. He thinks it will provide significant growth in revenue and profitability opportunities. Notably, Boxlight also acquired three LAN- based screen-sharing patents and a pending patent application from Circle Technology. They also secured a $22 million investment from Lind Global Macro Fund. Boxlight is set to hold a conference call on Monday, highlighting their third quarter 2020 results, with senior management answering questions from community members. I think either between now and then they may send out some press releases to fluff up the price. The call is at 4:30 p.m. Eastern, so after market close.
The education sector is outperforming again as COVID-19 developments turn the focus back to online schooling. Here are some notable big players in the industry:
- 2U (TWOU +4.8%)
- K12 (LRN +3.1%)
- Houghton Mifflin Harcourt (HMHC +1.8%)
- Chegg (CHGG +3.2%)
- Lincoln Education Services (LINC +1.4%)
I think BOXL can piggyback off of the momentum of these stocks leading into Thanksgiving because of the news surrounding online learning and the future prospects of growth for these companies.
- BOXL was riding right under the Moving Average 5 (blue line) then reversed right on that blue support line I drew. I think 1.403 was the best time to buy, but now at the time of typing, I think waiting for a dip under 1.65 would be good. The momentum is strong right now, but keep an eye out. Otherwise, manage your risk and size into the 1.70's it's riding now.
- The circled red is the space it has to fill. My price target is $2.
- The chart looks like a descending triangle, as drawn above. Therefore, with that green candle breaking out of the triangle, I think it can be the beginning of a new trend to fill the gap.
- 25% Insider owned
- 6.1% short float. Short percentage of float are important because they indicate data that can be used to investigate the reasons behind extreme bearishness of a stock, especially if markets are already at a peak. The figures of shares being shorted are driven primarily by institutional investors. This is because they are usually the first to start selling once markets have peaked.
To wrap this all up, I think it's worth keeping an eye on for speculative buyers looking to churn a profit in the span of a month. I have a position and am holding this puppy to the $2's. Hopefully this play doesn't end up in me gnawing at turkey bones in the back of a Boston Market come the 28th.
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