The for-profit education sector has been beaten up too much by investors and analysts, reasons...

The for-profit education sector has been beaten up too much by investors and analysts, reasons SA contributor Daniel Philip. He thinks after student loan balances begin to decrease, the industry will benefit from the higher rate of high school graduates and the improved cost structures at major providers. The sector (APEI, APOL, CECO, COCO, STRA, LINC, LOPE, BPI, DV, CPLA, EDMC, NAUH) should rally again eventually, although ITT Educational Services (ESI +11%) might be getting a nice little head start.

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Comments (2)
  • Roger Lindsley
    , contributor
    Comments (54) | Send Message
    This sector is not homogeneous. Traders should note that investors with long histories in this sector continue to unwind positions at each step up in stock prices. Familiarity breeds caution. Short term following of market-wide rally possible but serious long term financial issues exist within this sector. It is important to do your due diligence.
    5 Jun 2013, 03:22 PM Reply Like
  • Onepaw
    , contributor
    Comments (32) | Send Message
    Particular caution and diligence is merited with EDMC. It is the defendant in some eighty lawsuits targeting its recruiting practices, internal human resource policies, unfair targeting of minority communities, several pension funds argue malfeasance, last and certainly the most worrisome is the $11 Billion suit enjoined by the DOJ. Like the lawsuit earlier this week it has had the usual dismissal of some charges but is proceeding on the fundamental issues.


    Separate actions are being filed regarding eligibility for accreditation,.


    Some investors see the over reliance upon lobbyists for compliance justification to be a serious risk. Still others, published on this site, see a responsibility issue with the diploma mill quality of the schools and the lack of education credentials represented in senior management.
    5 Jun 2013, 08:40 PM Reply Like
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