Online education stocks continue to outperform the overall market. Just look at the sector’s performance (blue line) versus the S&P (500) (grey line) during the past 18 months.
https://www.optionszone.com/images/charts/online-education-stocks.gif
However, not all stocks in this sector are created equal. IPOs — such as Grand Canyon Education Inc. (LOPE), which I’ve discussed before — are much more attractive from a fundamental and technical standpoint than other online education stocks.
So today I want to talk about another IPO, one that I think is set to double in the next year.
Bridgepoint Education Inc. (BPI)
When trading IPOs, I think the best approach is to trade the secondary reaction versus the “out-of-the-gate” reaction, because it allows us to use technical analysis.
Below is a chart of Bridgepoint Education Inc. (BPI), which went public in April at $10.50.
As you can, see from the chart above, BPI is in a very large bullish symmetrical triangle. The stock looks to be on the verge of a breakout, but has experienced some volatility this week because of other less desirable stocks in the sector. But that just means we can get in at an even better price. BPI closed today at $ 15.25.
When it comes to IPOs (and all stocks really), we only want to trade the “best-of-breed” stocks, and that’s exactly what BPI is. With a growth rate of over 64% year-over-year and this bullish chart pattern to boot, you have to love the potential of this stock.
My target is for a double on this stock over the next year, but in the intermediate-term, a move to the mid-$20s looks likely. And, great news, BPI trades options, so use them to leverage that move up and you’ll be feeling pretty smart indeed!
IPOs are Back in Full Swing
I hate to say “I told you so” (oh, who am I kidding?) but I said months ago that IPOs were coming back in a big way.
So I will continue to bring OptionsZone readers the best ones, just like I’ve done with DigitalGlobe (DGI) and LogMeIn (LOGM). Both made new 52-week highs after my buy alerts, which you can review here and here.
Oh, and have you seen what’s happened with Talecris Biotherapeutics (TLCR)? The stock took off running after I recommended it in late November.
And my first online education IPO pick, LOPE, also looks ready to explode.
IPOs are back and they’re hot, hot, hot! So take a look at BPI now, and be on the watch for my next IPO recommendation.
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