Tiger Global Management leader Chase Coleman (Trades, Portfolio) disclosed this week he established a 5.8% stake in Bright Scholar Education Holdings Ltd. (BEDU, Financial) on Feb. 28.
According to GuruFocus real-time picks, the investor, who is a former protégé of Tiger Management founder Julian Robertson (Trades, Portfolio), picked up 1.6 million shares of the Chinese company, which went public last May, for an average price of $18.10 per share, giving it 0.23% portfolio space.
The education company, which operates international and bilingual K-12 schools in China, has a market cap of $2.36 billion; its shares were trading around $17.97 on Tuesday with a price-earnings ratio of 47.29, a price-book ratio of 9.06 and a price-sales ratio of 9.62.
According to the Peter Lynch chart below, the stock is overpriced, as it is trading above its fair value.
GuruFocus rated Bright Scholar’s financial strength 9 out of 10 as it has no debt. Its profitability and growth, however, was rated 2 of 10 despite having an interest margin that outperforms 75% of competitors.
Jim Simons (Trades, Portfolio)’ Renaissance Technologies has also taken an interest in the stock, holding 0.22% of outstanding shares. Guru Robert Karr (Trades, Portfolio) was also invested in Bright Scholar in the second quarter of 2017, but closed his position the following quarter.
While GuruFocus data shows the stock gained 50% from the day of its initial public offering to the end of 2017, it has fallen 9% year to date.
Specializing in internet companies, Coleman’s portfolio of 59 holdings is largely invested in the consumer cyclical and technology sectors. He does have positions in several other education companies, however. They are New Oriental Education & Technology Group Inc. (EDU, Financial), Rise Education Cayman Ltd. (REDU, Financial) and TAL Education Group (TAL, Financial).
Disclosure: No positions.
