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The selloff in for-profit education stocks is linked to the higher regulation the sector may see...

The selloff in for-profit education stocks is linked to the higher regulation the sector may see under an Obama administration, according to CNBC's Karina Frayter. After the Department of Education adopted a "gainful employment" rule and President Obama signed an executive order to increase transparency, traders may be wondering what's next for the sector in the form of oversight.
Comments (1)
  • At one point The Street published that this stock will "break out". It is hard to say if this was tongue in cheek or misguided.

     

    Not much has changed for this stock. There are still sixty some law suits that will need to be settled. The goodwill value of all of its' brands is virtually nil. The schools still deliver credits that can not be transferred to competitive schools. What few graduates there are can not find jobs in a market where employers are well aware of the diploma mill quality of these credentials. The blogosphere is awash in former instructors and faculty who confess their short comings and the entanglement the EDMC environment has become. Tens of thousands of former students are on Facebook and other social media sites urging students to look elsewhere. EDMC continues to entice disadvantaged students by lowering admission standards and forcing instructors to pass otherwise failing students. Finally there is the question of the adequacy of an education that does not require ACT, SAT, GRE, GMAT or even reasonable evidence of academic achievement to enroll, and to be granted Title IV funding.

     

    The political climate is severe. John Cornyn and a few other puppet masters may be beholden to the largess of EDMC board and executive donations. This is hardly enough to withstand the manifest necessity of regulations on these companies. Mitt can not help McKernan, Snowe, and Nelson now. What precious influence and capital he does have, will not likely be squandered on people who prey on the 47%.

     

    Short sellers should buy these up--they are bargain basement and may go with the market trend. If so, there may be some gain. The most likely prospect is that the real estate will go to Goldman and Provident and the call centers go overseas; there may be an opportunity there.

     

    Good grief, why would one want to mess with a stock that requires so much attention? Good grief, why would one want to buy a stock that he/she would not admit to owning?

     

    Watching the demise of this sector has become a pastime. Lets not get too involved in the color and commentary. Its a new start. Why not look at energy or engineering?
    7 Nov 2012, 10:53 PM Reply Like
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