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Global Education Communities Corp T.GEC

Alternate Symbol(s):  GECSF

Global Education Communities Corp. is a Canada-based education and student housing investment company. The Company is focused on the domestic and global education market. The Company operates business and language colleges, student-centric rental apartments, recruitment centers and corporate offices at 41 locations in Canada and abroad. Its education subsidiaries include Sprott Shaw College Corp., Sprott Shaw Language College, Vancouver International College Career Campus, and CIBT School of Business & Technology Corp. It offers over 150 educational programs in healthcare, business management, e-commerce, cyber-security, hotel management, emergency paramedic, and language training through these schools. It owns Global Education City Holdings Inc., an investment holding, and development company focused on education-related real estate. It also owns Global Education Alliance Inc. and Irix Design Group Inc. It serviced over 14,277 domestic and international students.


TSX:GEC - Post by User

Comment by TickBombon Dec 04, 2019 3:19pm
84 Views
Post# 30422162

RE:why

RE:whyThere is obvious compounding internal to the business now, although chunky earnings.  Up until a couple years ago there was only the education business (a terrible business).  But the student houding development business is starting to pay off.  I think what you should do is look at other compounders early in their lives. 

Take MTY Restaurants.  From 1996 to today it went from about $1.6 to $56.  But from the 90's until 2004 it went below $0.50, except for a period in 2000 when everything went crazy.  You could have bought millions of shares at 0.30-0.50 and made a killer return if you understood their strategy (same store growth doesn't matter, cheap acquisitions at 20-30% FCF yields compounds).  That was the compounding effect (profits into other restaurant franchises, and so on with zero organic growth).  But you would have looked stupid for years and kept buying.  You would have looked very stupid if you bought in 2000, but it would have turned out ok in the long run.  No dividends until 2010, but you would have had an 18% compound rate if you held to today.  All you had to do is not sell.  Sometimes MTY was overvalued, sometimes undervalued.  But I wonder how many retail investors held on for 30 years.  I wonder how many people bought at 0.30 and sold at 0.6.  If you find something that compounds just keep buying and never sell.

CIBT hasn't really had a compounding effect in the past.  In fact it has been a terrible business from 1996 until the past could years (which could be preventing people from investing with a chart like that).  I mean look over the same period, MTY has grown to earning over $4/share frmo a stock that was 0.30-0.5 for 10 years.  I think (within the past couple years) CIBT has found a compounding activity in real estate that leverages its education business.  The deals exited so far have high returns on invested capital.  CIBT is taking profits, and reinvesting the cash into more developments that return 20-30% annually.  So what you have to do is accept that the stock is underpriced and just hold on or buy more.  Unless you want to buy it up to make your bank account look higher, then getting frustrated about valuations is not worth the mental effort.  Eventually (who knows when) the compounding effect will be more drastic and the price will go up.  I think this is one of those cases that was obvious and in 5-10 years people will regret not buying more when it was this low.
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