One of the advantages of the current downward trend in the Stock Market is that you can find values that would not exist in an upward market. One of these companies is our latest recommendation, DeVry Universty, Inc. (NYSE:DV). It has more than 90 locations throughout the United States. The degree programs match what is needed for the current job market. In fact, 96 of the Fortune 100 companies employ DeVry graduates.
As I see it, DeVry is providing a very necessary service to remedy our current work force’s deficiencies. Skills are increasingly mismatched with what is now required. In an ever-evolving world of technology and healthcare, the job skills that are now needed are what the university provides, with an excellent program of post secondary education. Students are able to receive Associates, Bachelors and Masters Degrees.
DeVry is currently trading in the $34 range, which is way below its high of almost $75 a share in 2010, even though earnings have been up every year for the last eight years.
It is a definite value with a price/earning ratio that is one-third of its average and is not far above its book value. This indicator is rare for a service company.
DeVry’s balance sheet is strong with $450 million in cash and zero long-term debt. This gives the company the ability to make strategic acquisitions. Growth is also evident with a 23.8% return on equity.
One important variable that I always look for is how much stock management owns. In DeVry’s case, management owns 4.4% of company stock. This gives the company the kind of positive long-term outlook that is essential for the long term.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DV over the next 72 hours.