UTI

Our Reports on Stocks in the For-Profit Education Industry

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Image Source: GotCredit  Structure of the Education Services Industry The higher education industry is fragmented with no single private or public institution garnering significant market share. The for-profit education space competes primarily with traditional four and two-year degree-granting accredited colleges and universities. Industry participants are exposed to significant regulation on both the federal and state level and must maintain institutional accreditation to participate in Title IV programs. Risks to federal student funding aid programs and “gainful employment” challenges pose addition threats to the business. We don’t like the significant regulatory risks of the industry. Please click on a company name below to view the corresponding equity report: Adtalem Global Education (ATGE) << Our Dividend Reports

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

New Taxes? Trump’s Misstep and Seeming About-Face

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Image Source: FactSet and Valuentum estimates (2019, 2020) News that Trump was considering new taxes, his failure to repeal Obamacare, and the seeming about-face on for-profit education regulations have put the probability of corporate tax reform in jeopardy, from where we stand. If we’re right, the implications on the market could be considerable… and not in a good way. Let’s talk about this in the context of current market valuations. By Brian Nelson, CFA The shot across the bow has been fired. The news came and went, and many seemed to ignore its potential massive implications. What am I talking about? As you have read by now, Donald Trump’s first major move as President has resulted in failure–a divided Republican … Read more

For-Profit Education Stocks Don’t Make the Grade

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The Valuentum analyst team discusses the challenges many for-profit institutions face, the growing student loan problem, and hopes for a less-stringent regulatory environment during the Trump administration. The team’s favorite idea in the space is also revealed. ~8 mins. If you cannot view the podcast below, please select the link or view the transcript below. Brian Nelson, CFA: According to a recent article by the Wall Street Journal, “more than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed.” How much is $200 billion? To put that number in perspective, it equates to wiping the entire equity value of a global bank like JP Morgan (JPM) completely … Read more

Dividend Increases/Decreases for the Week Ending September 18

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Below we provide a list of firms that raised their dividends during the week ending September 18. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Artesian Resources (ARTNA): now $0.2216 per share quarterly dividend, was $0.2183. Blackstone Mortgage Trust (BXMT): now $0.62 per share quarterly dividend, was $0.52. Citizens Financial Services (CZFS): now $0.41 per share quarterly dividend, was $0.405. Elmer Bancorp, Inc. (ELMA): now $0.33 per share semi-annual dividend, was $0.32. The First of Long Island (FLIC): now $0.20 per share quarterly dividend, was $0.19. Golden Enterprise (GLDC): now $0.03375 … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Apollo’s 1Q 2014 Results Show Continued Enrollment Declines, Weakening Cash Flow

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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

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more

For-Profit Education Stocks Keep Falling: We’re Still Not Touching the Industry

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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

How to Think About Corporate Tax Reform

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