Wey Education (LON:WEY) was pitched to the Stockopedia Staff Investment Club on the 18th August and shares were purchased a day later at 24.45p. The share price has shown a healthy uptrend for more than 18 months that accelerated in March as lockdown began. The shares now trade at 26p.


df9434ca26b0dcff5a09d05f582184d3d72c1c8e1602538083.png

TLDR;

Wey Education (LON:WEY) - a micro cap growth share benefiting from the accelerated shift to online education due to coronavirus and technology trends.

  • Bull Points: covid beneficiary, significant cost advantage vs physical schools, clear growth opportunity in a fragmented segment of a large market.
  • Bear Points: "it's just a school", no clear technology advantage, recent director sales, marketing execution risk, illiquid micro-cap, premium valuation.

Profile

  • About the Stock: Wey Education is listed in the Consumer Defensive sector, providing online education both in a B2C and B2B fashion. It trades at 26p per share, with an exchange market size (EMS) of 15k - it's very illiquid. This is a Micro Cap with a £36m market cap and is 'highly speculative' according to the RiskRatings. The StockRank is 77 - it's not cheap, but is profitable, growing and has a good Quality Rank of 84 and a strong Momentum Rank of 91.

  • Opportunity Type: In our Styles framework, this is a Highly Speculative, Micro Cap, High Flyer. It's a essentially a strong growth, low PEG share.

cceb65b2c62404ba536c7f7fd1682cbbe4200d8a1602538131.png

Business & Model

  • Company History: Wey Education was founded in 2004. It provides 100% online education across 2 business units: InterHigh School and Academy21. The company states that it has been "providing a positive alternative to physical schooling since 2005." It has educated 12,762 learners since it was founded, and has 144 employees.
  • Business Segments:
    • Interhigh - this is the UK's largest online independent, fee paying school which the company says will have more than 2400 students by year end 2020.
      • It provides fully synchronous, class based, online Primary, Secondary and Sixth Form Education and thus competes with physical schools rather than the on demand educational sector.
      • Interhigh claims 73% Exam Pass Rates (A-C) for GCSEs. The Gov.uk website shows the new Grading system 1-9 for GCSEs and it's not clear if a C is Grade 5 of Grade…

Unlock the rest of this Article in 15 seconds

or Unlock with your email

Already have an account?
Login here