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May 2, 2014, 1:34 PM
- Joel Greenblatt's screen looks to find stocks with high "earnings yield" - a high ratio of profits to enterprise value. Companies are further screened for a strong return on capital. When a stock scores well with both criteria, it's usually a good company being undervalued by investors.
- For picking individual stocks, there are probably better methods, but as a group, Magic Formula names have vastly outperformed the broad market.
- Although defense names have done well over the past couple of years, the Magic Formula continues to identify Northrop Grumman (NOC +0.2%), General Dynamics (GD +1.4%), and Raytheon (RTN +0.6%) as attractive. Firearm names Smith & Wesson (SWHC +0.8%) and Sturm Ruger (RGR +0.3%) also make the cut.
- A number of videogame makers show up as well: Take-Two (TTWO +0.3%), Activision Blizzard (ATVI +0.2%), GameStop (GME +2.8%), and the struggling recent IPO King Digital (KING -0.3%).
- Not too surprisingly, the Magic Formula also continues to like plenty of big-cap tech names: Cisco (CSCO -0.2%), CA, Inc. (CA -0.5%), Microsoft (MSFT -0.5%), Hewlett-Packard (HPQ -0.5%), and Apple (AAPL +0.1%).
- Hardly market laggards, media names like Time Warner (TWX -0.8%), Viacom (VIA +1.4%), Omnicom Group (OMC), and Starz (STRZA +2.3%) also show up on the list, as do struggling multi-level marketers and for-profit education stocks: HLF, NUS, APOL, ESI, CPLA.
- Punished by investors for not being as hot as they once were, Coach (COH +0.2%), Francesca' Holdings (FRAN +0.1%), and Gap (GPS -1.3%) are Magic Formula picks today.
Apr. 2, 2014, 12:46 PM
Apr. 2, 2014, 8:30 AM
- Apollo Education (APOL) trades lower in early action after revealing a weakening enrollment trend.
- New student enrollment fell 16.5% Y/Y to 32.5K students while total enrollment is off 17%.
- During the firm's conference call, CEO Gregory Cappelli disclosed more information about the government subpoena the company received. The exec noted Apollo is being asked for details on UOP's operations in the northeast part of the U.S. (CC transcript).
- APOL -3.2% premarket
- Previous: Earnings, downgrade
Apr. 2, 2014, 8:08 AM
Apr. 1, 2014, 5:38 PM
Apr. 1, 2014, 4:04 PM
- Apollo Group (APOL): FQ2 EPS of $0.28 beats by $0.09.
- Revenue of $679.1M (-18.6% Y/Y) misses by $9.94M.
- Share -1.7% AH.
Apr. 1, 2014, 12:10 AM| Apr. 1, 2014, 12:10 AM | 2 Comments
Mar. 31, 2014, 5:35 PM| Mar. 31, 2014, 5:35 PM
Mar. 14, 2014, 4:33 AM
- The White House has proposed rules that could cut federal funding to higher-education training programs if the cohort default rate among graduates for their student loans exceeds 30% for three years in a row.
- Programs could also lose out if annual related debt payments surpass 20% of their discretionary income or 8% of their total income.
- The proposed regulations are tougher than similar rules that were struck down in court in 2011.
- The for-profit sector is unsurprisingly not happy with the rules.
- Related tickers: APOL, CECO, COCO, DV, STRA, ESI, LOPE, APEI, EDMC, LINC.
Feb. 27, 2014, 1:47 PM
- "ITT Educational Services (ESI -2.2%) believes that the CFPB's complaint should never have been filed. The complaint overwhelmingly focuses on issues that are unrelated to consumer finance, and attempts to cast a negative light on aspects of ITT Tech's activities that are extensively regulated by other government agencies."
- The core of the CFPB's claims concern just six months of loans, but the bureau knows, says ITT, independent parties provided those loans and the programs ended years ago. "Significantly, ITT Tech did not make any money, in interest or fees, from those third-party programs, which were designed to help students during the recent economic downturn."
- "Much of the complaint relies on 'mystery shoppers,' a program that ITT Tech itself voluntarily uses to make sure its policies are being followed by its employees, and to help ensure that errors in implementation are caught and corrected."
- "The complaint is an aggressive attempt by the Bureau, recently created by the Dodd-Frank Act, to extend its jurisdiction into matters well beyond consumer finance. It is unjustified as a matter of law and mistaken as a matter of fact."
- That's the point, says Herb Greenberg. "It creates a roadmap ... other for profits should shudder."
- Previous coverage of CFPB suit
- Other sector names: APOL, CECO, COCO, DV, STRA, LOPE, APEI, EDMC, LINC
Jan. 8, 2014, 11:38 AM
- Education stocks are ripping gains up and down the sector after Apollo Education (APOL +12.7%) showed the way to profitability.
- The slice-and-dice job at the company did wonders for Q1 EPS, but didn't cut into FY14 revenue projections.
- Investors are betting other for-profit players will follow the road map.
- Gainers: CECO +7.4%, COCO +1.8%, DV +5.1%, STRA +5.5%, ESI +4.7%, LOPE +2.6%, APEI +1.8%, EDMC +3.5%, LINC +2.4%.
Jan. 7, 2014, 5:38 PM
Jan. 7, 2014, 4:56 PM
- Shares of Apollo Group (APOL) are up 3.2% AH as investors digest the company's Q1 results.
- Net revenue falls 22% Y/Y as University of Phoenix degreed enrollment slides 17.7%.
- New degreed enrollment slips 22.9% over the same period in 2013.
- FY14 outlook: Operating income of $400-450M on net revenue of $3-3.1B. Consensus on the top-line is $3.04B. (PR)
Jan. 7, 2014, 4:09 PM
- Apollo Group (APOL): FQ1 EPS of $1.04 beats by $0.14.
- Revenue of $856.3M misses by $4.28M. Shares +2.45% . (PR)
Jan. 7, 2014, 12:10 AM
Jan. 6, 2014, 5:35 PM
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