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Are Education Stocks Worth Another Look? APOL, ESI, CECO, BPI, DV

May 10, 2011 8:38 PM ETAPOL, ESI-OLD, PRDO, ZVOI, ATGE
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While the markets rallied back up after the mid-March lows, there are a few sectors that were left behind.  One group was the education stocks, which really haven't done much so far this year.  However, that maybe changing.  Education stocks seem to begin to catch some attention from investors.

Take a look at Bridgepoint Education (BPI), which reported earnings last week and raised its earnings forecast for the whole year:

After the earnings pop on 5/3, it retreated with the rest of the market.  But, on Monday and today, it rebounded back to challenge its recent high.  Its 52-week high is $25.716.  I think it is on its way to test that level again.

Apollo Group (APOL) caught my eyes today.  This stock really has done nothing for the past 3 years.  In fact, it is down about 50% from its 2008 high, before the 2008 market crash.  In late 2007, it was an $80 stock.  It traded down to the $40 level in 2008; bounced all the way to $90 in 2009; and, here it is now in 2011, back to the $40 level!

Today's +2.59% gain could be significant, as it seemed to have re-established a support at $40.  This pop to $41.61 can attract more buyers to drive it back to the $46 level, which was the February high.

Other education stocks such as ESI, CECO, and DV also went higher today.  All are showing new bases, off of which they can rally.  ESI is a very volatile stock and can be difficult to trade.  In late March, ESI went from $66 to $80 in 2 weeks, only to go back down to $66 in another 2 weeks.  Look for ESI to test that $80 level as this whole group rallies higher.

Good night and HappyTrading! ™

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Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in APOL, ESI, CECO, BPI, DV over the next 72 hours.

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