Universal Technical Institute: A Counter-Cyclical, For-Profit Trade School In The Beginning Stages Of A Turnaround

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About: Universal Technical Institute, Inc. (UTI)
by: Cardon Capital
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Cardon Capital
Value, special situations
Summary

We've tracked UTI closely for years, anticipating it would benefit enormously once the cycle turned.

The stock has traded along all-time lows for the past 5 years, largely because it has struggled operationally as its core business is counter-cyclical.

UTI is a prime beneficiary of previous governmental regulations, as they now have minimal competition.

Trading at 8x 2019 EBITDA, with a business model that has tremendous operating leverage, we think UTI will generate its current market cap in cash in 5 years as student enrollments are set to erupt higher.

Overview

Universal Technical Institute (UTI) is the nation's leading postsecondary, for-profit trade school specializing in training students to become technicians in automotive, diesel, & motorcycle repair. Additionally, UTI offers programs for students to