Profile: China Education Alliance, Inc., an education service company, provides online education and onsite training in the People’s Republic of China. It operates www.edu-chn.com, an education network platform that is based on network video technology and data sources of elementary education resources. The company offers a data base resource under the ‘Famous Instructor Test Paper Store’ name.
Website: http://www.chinaeducationalliance.com/
Market Cap: 260$M
Trading Thesis:
- Technical Analysis shows a powerful uptrend for the mid-term time frame, with an ascending triangle pattern for short term. CEU just reacted on it's support and will most likely be set for a breakout and further mid-term upside expansion.
- Fundamental analysis shows a solid growth stock with nice prospects (geo and sector). Estimates point for a 0.55$ EPS FY09 and 0.715$ EPSFY10, so this stock is trading at just 8X earnings FY10 while the sector trades more than 2 times above.
I expect a technical breakout sometime soon, giving a lot of upside potential (above $8), while the downside potential remains low ($5-5.5$), this scenario is set on a positive and sustainable fundamental context.
Trading Plan:
Buy at the open, stop @ 4.9 and limit sell @ 8.25