JBL: Big Dreams and Bigger Dollars

In honor of Martin Luther King Jr. Day on Monday, I have a stock that is from a company that levels the playing field for kids in education.

Great people have great dreams. Martin Luther King and Rosa Parks had a dream of ending segregation. Some companies have great dreams too.

Educate Inc. (EEEE Quote) has a dream of providing a service that helps kids achieve their academic goals. I just have a dream of making money. That's why I recommend this stock.

Educate Inc. provides a great service to our education system. Schools are understaffed in most places; they simply don't have the manpower to work one-on-one with very many students. This is where Educate comes in.

The company provides tutorial services through learning center franchises throughout North America, Canada and Europe. Kids that normally would fall through the cracks can get special tutors that public schools cannot provide. The learning centers also help kids prepare for college entrance exams in the highly competitive upper-education field.

Educate also has government-funded contracts to provide supplemental education services and special needs service through public and private schools.

Now to my dream of making money: Educate is growing like crazy. Formed in 2003, Baltimore-based Education Inc. is North America's largest franchiser of learning centers, with its Sylvan Learning Centers also in Canada and the Europe. Its products include the popular Hooked on Phonics series.

Educate has a projected growth rate of more than 20% with a forward looking multiple of less than 20, based on consensus EPS estimates of 71 cents. With a P/E-to-growth ratio under 1, this stock is cheap.

Educate is the market leader with great growth prospects. Given the political climate we have, it is certain to grow. It's very simple; the last thing a politician will do is cut government contracts to a service that helps our youth. That would be political suicide.

To view John Layfield's video take of this celebrity investor column, click here.