CEDU

Industry proxy for the ‘Education (For-Profit)’ group, Apollo (APOL) reported weak fiscal first-quarter 2014 results Wednesday. Net revenue declined to $856 million to $1.1 billion in the first fiscal quarter of last year. University of Phoenix Degreed Enrollment fell nearly 18% from the same period a year ago, while New Degreed Enrollment tumbled nearly 23%.   Image Source: Apollo Operating income dropped significantly ($169 million, was $231 million), and income from continuing operations, excluding special items, came in at $1.04 per share compared to $1.22 per share in last year’s quarter. The for-profit education provider’s cash balance shrunk to $917 million from $1.52 billion as it paid down debt. Net cash from operations fell to $129 million in the three … Read more

Key Takeaways: ·        Active enrollment levels continue to fall across the industry. ·        Some universities are at risk of losing accreditation. ·        The outlook for government-funded education isn’t great. ·        Evidence is mounting that a for-profit education may not be worth the cost. ·        Grand Canyon (LOPE) and Capella (CPLA) are proving to be worth the cost, explaining a great deal of outperformance. DeVry (DV) has some nice businesses, but its core remains challenged. ·        We do not like any firm in the industry. Please refer to our Best Ideas Newsletter for our favorite investment opportunities. List of industry constituents: American Public (APEI), Apollo Group (APOL), Bridgepoint Education (BPI), Career Education (CECO), ChinaEdu Corp (CEDU), Corinthians Colleges (COCO), Capella Education … Read more