Entering text into the input field will update the search result below

Educational Development Corporation: Stock Decline, Management Incentive Alignment Indicate Potentially Attractive Entry Point


  • While EDUC revenues are likely to decline modestly as people stop staying at home, we believe revenues will still be above pre-pandemic levels due to their consultant-style selling.
  • We believe EDUC is an attractive investment opportunity backed by a superb balance sheet and aligned management through insider ownership.
  • EDUC's recent decline in stock price is an overreaction and in our view presents a compelling entry point.
  • Looking for more investing ideas like this one? Get them exclusively at Best of the Uncovereds. Learn More »
Brightening his world with books

PeopleImages/E+ via Getty Images

Educational Development Corporation (NASDAQ:EDUC) has a strong balance sheet and cash flows and pays consistent dividends. It has had strong revenue growth over the last seven years. We expect this trend to continue. The stock has fallen recently, and we believe now is

Best of the Uncovereds offers new initiation reports on roughly two dozen companies per year, with a focus on under-followed small and mid caps with significant potential. We provide a quarterly earnings update reports on all companies covered, as well as flash reports on significant news announcements by companies. We go further for members, providing recorded interviews with management teams of covered companies when available and a monthly quantitative based "Market Indicators and Strategy Report."

This article was written by

Singular Research profile picture
Singular Research aims to be a trusted supplier of independent research on micro/small cap companies. We provide initiation reports and quarterly updates on roughly 40 uncovered companies. We cover growth and value style equity ideas leveraging the extensive experience and knowledge of our in house staff of over 6 CFA's. Award winning original research with a following of over 105 institutional clients with over $60 billion in assets under mgmt. Singular is closely associated with the existing author Cook Capital Management.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of EDUC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (5)

Seems interesting and insiders seem aligned. I realize inventory is high, but inventory turns are never that good for this company, and there is a risk that if they lose consultants, this inventory has to get reduced. Inventory is almost the entire market cap!
For me, it is cheap, and the stock could work, but the mechanics of how the business operates when they have to shed consultants is not clear and could result in unintended and unforeseen consequences. If there was no debt, it would be a different story, but debt on pre-covid financials looks to be 3x (on 10M in EBITDA). Worth keeping an eye on and if convinced they would not shed consultants, I might buy-in to the thesis.
Large Margin of Safety profile picture
@Buyside Guy, CFA Nice layout of the risks and I agree that the uncertainties probably put me on the side line for now.

One thing, debt is ~$11M. So not actually very levered on pre-covid EBITDA.
Steven Miller profile picture
Thanks for the article. I am a fan of Unsborne. A family friend is a consultant and strongly believes in the product. But she is a teacher and has not had the time now that she's back in the classroom. My concern is that this is generally true across the board. It's tough to buy in until there is some sign that revenue is picking up again.
I started buying recently in the low 10s. I first jumped in too quick when not accounting for their crazy run-up because of how they benefited during covid. But when dismissing that one year, and going back to prior covid levels, the growth is still good. Thank you for mentioning that.

They might not be a highly attractive company, but they have ownership, strong financials a decent dividend.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.