After a 95% Crash, This China Education Stock Has Drawn a $35 Million Bet From One Institutional Investor
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New Oriental Education & Technology Group (EDU +0.23%) saw a significant purchase from Singapore-based Serenity Capital Management, which increased its position by approximately $21.6 million, according to a November 13 SEC filing.What HappenedAccording to a Securities and Exchange Commission (SEC) filing dated November 13, Singapore-based Serenity Capital Management increased its stake in New Oriental Education & Technology Group (EDU +0.23%) by 411,380 shares during the third quarter. The updated position totals 656,878 shares valued at $34.9 million as of September 30. The trade lifted New Oriental Education & Technology Group as the fund's fifth-largest holding out of eight reported positions.What Else to KnowThe fund's buy brought New Oriental Education & Technology Group to 8.8% of its 13F reportable assets under management.Top holdings after the filing: NASDAQ: BZ: $117.6 million (29.9% of AUM)NYSE: ZTO: $97.1 million (24.6% of AUM)NYSE: TAL: $53 million (13.4% of AUM)NASDAQ: HTHT: $49.8 million (12.6% of AUM)NYSE: EDU: $34.9 million (8.8% of AUM)As of Friday, EDU shares were priced at $55.67, down 5.3% over the past year and well underperforming the S&P 500, which is up 16.5% in the same period.Company OverviewMetricValuePrice (as of Friday)$55.67Market Capitalization$9.3 billionRevenue (TTM)$5 billionNet Income (TTM)$367 millionCompany SnapshotNew Oriental Education & Technology Group offers private educational services, including test preparation, after-school tutoring, language training, and online education programs across China.The company generates revenue primarily through tuition fees for in-person and online courses, as well as educational materials and consulting services.It serves students from pre-school to college age, with a focus on K-12 and test preparation markets in China, and students preparing for overseas studies.New Oriental Education & Technology Group is a leading provider of private education services in China, operating an extensive network of schools and learning centers. The company leverages a diversified portfolio of offerings, from language training to test preparation and online education, to address evolving educational needs. Its scale and breadth of services provide a strong competitive position in the Chinese education sector.Foolish TakeIn a tightly concentrated portfolio with just eight positions, increasing exposure to a stock that once lost more than 95% of its value signals a willingness to underwrite regulatory risk in exchange for durability and cash flow. This is not a momentum trade. It is a bet on survival and adaptation.The business today looks nothing like it did at its 2021 peak. Following China’s crackdown on for-profit tutoring, the company rebuilt around adult education, overseas test prep, consulting, and newer education-adjacent initiatives. The latest earnings back that up. First-quarter fiscal 2026 revenue rose 6.1% year over year to $1.52 billion, while operating income climbed 6% to $311 million. Non-GAAP operating margin improved to 22%, reflecting tighter cost control and a more disciplined operating model.Just as important is the balance sheet. The company ended the quarter with over $1.2 billion in cash, and management has also committed to returning at least 50% of annual net income to shareholders through dividends and buybacks starting this fiscal year.In a portfolio dominated by Chinese internet and education names, this position sits alongside peers facing similar policy risk. For long-term investors, the takeaway is simple: This is a bet that a scaled, profitable survivor can still compound from a far smaller but sturdier base.Glossary13F reportable assets under management: The portion of a fund’s assets disclosed in quarterly SEC Form 13F filings.AUM (Assets Under Management): The total market value of investments managed by a fund or investment firm.Stake: The ownership interest or number of shares held in a particular company by an investor or fund.Compound annual growth rate (CAGR): The average yearly growth rate of a value over a specified time period, accounting for compounding.Forward P/E: Price-to-earnings ratio using forecasted future earnings, indicating how much investors are paying for expected profits.EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; a measure of company valuation.Buy (in fund context): An investment action where a fund increases its holdings in a specific security.Top holdings: The largest investments in a fund’s portfolio, usually ranked by value or percentage of assets.TTM: The 12-month period ending with the most recent quarterly report.Test preparation: Educational services focused on helping students prepare for standardized exams or entrance tests.Educational materials: Products such as textbooks, workbooks, or digital resources sold to support learning and instruction.Learning centers: Physical locations where educational services, tutoring, or classes are provided to students.