Student boost for Navitas

Several pieces of good news for Navitas have helped lift the stock. We’re downgrading the recommendation a notch.

Navitas’s favourable tailwinds have strengthened in 2017. Recent data released by the Australian Government’s Department of Education and Training shows that year-to-date international student higher education enrolments for the period to April 2017 were up 15% from a year earlier. Navitas should receive its fair share.

The good news continues elsewhere too. Since our April review, Navitas’s target practice, the company has announced it has re-signed pathway program agreements with two overseas universities. In April Navitas re-signed the University of Manitoba until 2028, with this pathway program now the second-largest in Canada. Last month Navitas renewed its agreement with the UK’s University of Hertfordshire, which commenced in 2000, for another six years.

We’re still waiting on details of Navitas’s agreements with Curtin and Deakin universities in Australia, however. They’re due for renewal by the end of calendar 2017 and, as they’re longstanding relationships, they’re particularly important. With the share price having jumped above our Buy price, we’re downgrading to HOLD.

Note: The Intelligent Investor Growth and Equity Income portfolios own shares in Navitas. You can find out about investing directly in Intelligent Investor and InvestSMART portfolios by clicking here.

Disclosure: The author owns shares in Navitas.