Follow the Weight of Money to Guide You on 3P Learning Ltd (ASX:3PL)

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ASX 3PL - E Learning and Online Education

A big problem with the coronavirus is you can be a carrier and not know it.

Then when you can go about your daily business, you go on infecting others. Then those others infect others and on it goes.

The spike in new cases around the world has been alarming.

And the consequences are horrific.

It’s a matter of life and death, for the elderly, the very young, and those with compromised immune systems.

This is why governments have billions around the world in lockdown.

Staying at home, practicing social distancing, is what will slow the rate and finally defeat the virus.

For now though, the news continues to get worse.

And one gets the feeling that we’re talking months not weeks, before we all see the other end of this.

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In the UK schools are closed to slow the spread of the virus.

In Australia, most schools are staying open for now, but one wonders for how long.

Should things get worse, Aussie schools could close.

And many schools are scrambling to provide some form of online learning, whatever the case maybe.

You could look at listed distance learning stocks like 3P Learning Ltd [ASX:3PL]. They provide online education programs to schools and parents.

And cover all subjects from mathematics, spelling, literacy and science.

Not only here in Australia and New Zealand, but also in the North and South Americas, Europe, the Middle East and Africa.

Let’s run through the numbers.

The first half results posted in February, weren’t much to write home about. Sales and profits were well down.

The company said it had execution issues, in its Australia-Pacific sales strategy.

But the company is now moving back to a sales model that worked before.

And is expecting revenue and profit growth to turn around when it posts the full year results in August.

That might be true.

But often the chart gets more to the truth, so let’s bring it up. Here’s the weekly:

ASX:3PL Share Price Chart

Source: Optuma

[Click to open in a new window]

See how the 3PL share price is trading around a double bottom. And found support at around 60 cents or so. It’s a key level for this stock.

So, what now for the 3PL share price?

Well the double bottom, gives us a bit of a reference point to work with.

The company posted a loss, when it reported in February, but says they’re turning things around.

If that’s true, then the share price will hold that double bottom. And start to make some higher bottoms on the chart. Should that happen it might confirm the company announcement, that they expect a better second half.

Likewise, should it break below that double bottom level, it may suggest revenues continue to soften.

As always follow the weight of money, to guide your further studies.

At any rate, should the virus spread, and we see school closures, there could be big move to online educational materials

That makes long distance learning stocks like 3PL ones for the watchlist. It’s a space to watch.

Anyway, if you want to keep up to date on what’s happening in the markets and a whole lot more, you can subscribe to Profit Watch newsletter here.