Buy CDEL (DL) to Profit from Online Education

Posted August 1, 2008

“CDEL (DL:NYSE) just listed in the U.S. on Wednesday, and it’s beginning to look overseas for new customers. The company started offering online Chinese classes to English-language speakers. It’s a tiny program at this point, but it has the potential to grow.” — Stephanie Grimmett

by Stephanie Grimmett

Baltimore — (TFN): I should learn Chinese. Not a week goes by that I don’t regret not being able to read Chinese (and by that I mean Mandarin Chinese — the country’s official dialect), if not speak the language.

It’s a symptom of our international economic age: At least a tenth of the information on companies, industries and investments that I’d like to access only appears in Chinese. That’s a lot of data I can’t find because of a lack of language.

But thankfully, China Distance Education Holdings Limited (CDEL) is here to help.

CDEL is the largest online educator in China. The company gives prep classes for standardized education tests (the Chinese equivalent to SAT prep courses) and industry exams (like the ones to become a healthcare worker, lawyer or civil servant), and it provides the same higher education services that you see advertised on daytime television (you know, the “Do you want to make more money?… ” ads). In fact, you can think of CDEL as an online ITT Tech and the University of Phoenix all roled into one… and in Chinese. But that’s about to change.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Three Recession-Buster Stocks to see you through the next 6 months:

This $5 company has a lock on the key technology in China – and could generate gains of over 1,000%… Insiders are loading up on this battered contrarian energy play that could go up as much as 75% by November… And his tiny biotech holds the secret to crucial early detection of a debilitating disease AND could triple in value by next year. Get our FREE special report…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CDEL (DL:NYSE) just listed in the U.S. on Wednesday, and it’s beginning to look overseas for new customers. The company started offering online Chinese classes to English-language speakers. It’s a tiny program at this point, but it has the potential to grow.

The Chinese government recently informed foreign companies that upper-level management can’t get away with using translators to do business inside its borders anymore. Those who work there have to speak the language if they want to wheel and deal in the country. Managers must now pass a Mandarin-proficiency test, and many of them are scrambling to learn the language before they get kicked out of the country.

Add to that the fact that the U.S. is currently suffering from a shortage of Chinese-language teachers, and you get a whole bunch of people wanting to learn Chinese who don’t have the time to attend or sometimes even the access to classes in the subject.

If you’re adventurous and believe China will continue to grow in economic and political importance, like many parents seem to believe, an investment in DL may be a good idea. It’s already the largest online learning company in China, and it could build its customer base outside of China. But since the company just IPOd this week, I’d give it some time to shake out all of the bugs (and over-excited IPO junkies) before you put money into the stock.

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. You can pick your favorite reader. Or if you prefer, you can have the feed delivered to your email.