Rossen Rashev (Rossen.Rashev@gmd.de)
Fri, 18 Sep 1998 17:20:59 +0100
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From: "Rossen Rashev" <Rossen.Rashev@gmd.de> Date: Fri, 18 Sep 1998 17:20:59 +0100 Subject: [ifets] Another try - (Fwd) Size of Learning Market; Stock pick: Asymetr
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Regards,
Rossen Rashev.
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> Date: Thu, 17 Sep 1998 22:30:26 -0400
> Reply-to: Jim S <jim.s3@juno.com>
> From: Jim S <jim.s3@juno.com>
> Subject: Size of Learning Market; Stock pick: Asymetrix
> To: Multiple recipients of list P1484 <> To: Multiple recipients of list P1484 <P1484@listserv.readadp=
.com>
>
> LTSC,
> Here's an interesting article.
> Jim Schoening
> -----------------------
>
> As the Knowledge Economy Expands, New Opportunities Are Developing in th=
e
> Education Industry, Nationsbanc...
>
>
> Business Wire
> 17-SEP-98
>
> SAN FRANCISCO--(BUSINESS WIRE)--Sept. 17, 1998--As the US economy
> transitions from an industrial focus into a knowledge-based economy, hug=
e
> opportunities are arising for companies to offer educational services to
> everyone from toddlers to corporate employees, according to an education
> industry analyst for NationsBanc Montgomery Securities.
>
> "The educational sector is a huge portion of the US economy- 10 percent
> of gross domestic product (GDP), yet the industry is highly fragmented,
> very inefficient and lacking in professional management," said Keith Gay=
,
> an analyst for NationsBanc Montgomery Securities. "For instance, the US
> spends an average of $6,700 per student for K-12 education, yet only 50
> percent of that money reaches the regular classroom. Where does the rest
> of it go? There's a value proposition for private companies to come in t=
o
> deliver better outcomes on a cost-effective basis," he added.
>
> Gay's comments came at the 28th Annual NationsBanc Montgomery Securities
> Investment Conference, which is running this week in San Francisco. The
> conference, which is the firm's largest to date, features 245 companies
> with a combined market capitalization of $1.6 trillion making
> presentations to more than 1,900 portfolio managers. These managers
> represent 280 different institutions with a combined $3.5 trillion in
> assets under management.
>
> Gay asserted that there are opportunities for private companies to
> revolutionize education at all levels, from childcare and K-12 education
> to colleges and corporate training. Despite a long history of
> fragmentation, government control and daunting political barriers,
> education remains a $660 billion industry that is ripe for the
> introduction of measurable outcomes, strong accountability, cost-control=
s
> and professional management.
>
> In the childcare arena, Gay said, educators are coming to realize that
> early learning programs translate into educational and social success in
> later years, while large companies are becoming aware that worker
> productivity can be improved with the introduction of company-sponsored
> childcare programs. An estimated $3 billion is lost annually in lost
> productivity due to childcare issues, Gay said. In this market, Gay's
> recommended stock pick is Bright Horizons Family Solution(1), which has
> over 260 corporate-sponsored childcare centers.
>
> In the K-12 segment, Gay believes there are huge opportunities for
> improvement in terms of enhanced curriculums, greater emphasis on math
> and science and dramatic improvements in technology. There are no
> publicly traded companies yet that are managing K-12 schools, but The
> Edison Project, which is managing private schools in 26 states, has the
> potential to become a billion dollar plus company over the long-term.
> Investors can participate in this market now by investing in Sylvan
> Learning Systems(1), a provider of tutoring services with approximately
> 700 centers globally and 190 centers located directly inside schools.
>
> Post-secondary education is increasingly seen as a must by both companie=
s
> and workers, and Gay believes that both the coming surge in enrollment o=
f
> children of the Baby Boomers, as well as adults returning for continuing
> education, will drive changes in this market. Gay asserts that the new
> model of college education is learner-focused, rather than
> teacher-driven, and that students are given access to memory in the form
> of continuous training, rather than being expected to simply commit fact=
s
> to memory. Traditional schools are not responding to this changing
> environment, but several publicly traded companies, such as Apollo Group=
,
> Inc.(1), Devry, Inc. and Education Management(1)- all of which Gay
> recommends- are exploiting this area.
>
> The need for corporate education and training is being driven by a
> shortage of skilled knowledge workers and the rapid obsolescence of
> collegiate learning, Gay said. "Companies simply can't get enough skille=
d
> workers to sustain their growth," he added. This is a $60 billion market
> in the US and a $110 billion market worldwide, Gay said. In this
> segment, Gay is recommending three stocks: Asymetrix Learning System(1),
> CBT Group and Provant, Inc(1).
>
> NationsBanc Montgomery Securities LLC (NMS), a subsidiary of NationsBank
> Corporation, is a full-service investment bank and brokerage firm with
> approximately $900 million of regulatory capital. The company provides
> research, trading and issuance in the equity and fixed-income markets
> (high yield, emerging markets, high grade and mortgage-backed markets)
> Other services include M&A advisory, financial buyer coverage, loan
> syndications, global investment banking, real estate finance, mortgage
> finance, money markets and the primary dealer.
>
> Through NationsBank, NMS clients can also access products and services
> that include senior bank debt, bridge financing, real estate banking,
> treasury management, trade finance and risk management (derivatives
> products and foreign exchange).
>
> NMS is a registered broker-dealer with the Securities and Exchange
> Commission and is a member of the National Association of Securities
> Dealers and the New York Stock Exchange. NMS employs more than 2,700
> investment professionals. (1) NationsBanc Montgomery Securities LLC
> currently maintains a
>
> market in this security. NationsBanc Montgomery Securities LLC
>
> was manager or co-manager of a public offering and/or has
>
> performed investment banking or other services for this company
>
> in the last three years.
>
> Jennifer A. Smith, 415/913-5968
>
>
>
>
>
>
>
>
>
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