New Oriental Education & Technology Group I (EDU): Today's Featured Diversified Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

New Oriental Education & Technology Group I ( EDU) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day up 0.6%. By the end of trading, New Oriental Education & Technology Group I fell 34 cents (-1.7%) to $19.19 on average volume. Throughout the day, 2.2 million shares of New Oriental Education & Technology Group I exchanged hands as compared to its average daily volume of 2.7 million shares. The stock ranged in price between $19.08-$19.68 after having opened the day at $19.35 as compared to the previous trading day's close of $19.53. Other companies within the Diversified Services industry that declined today were: China HGS Real Estate ( HGSH), down 19.1%, Daegis ( DAEG), down 10.5%, Research Frontiers ( REFR), down 6.1%, and Reis ( REIS), down 5.5%.
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New Oriental Education & Technology Group Inc. provides private educational services primarily in China. New Oriental Education & Technology Group I has a market cap of $3.02 billion and is part of the services sector. The company has a P/E ratio of 18.5, above the S&P 500 P/E ratio of 17.7. Shares are down 20.8% year to date as of the close of trading on Tuesday. Currently there are six analysts that rate New Oriental Education & Technology Group I a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates New Oriental Education & Technology Group I as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, premium valuation and disappointing return on equity.

On the positive front, Innovaro ( INV), up 16.6%, American Learning ( ALRN), up 11.6%, ENGlobal Corporation ( ENG), up 11.1%, and China Yida ( CNYD), up 10.9%, were all gainers within the diversified services industry with Ulta Salon Cosmetics & Fragrances ( ULTA) being today's featured diversified services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).

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