Yesterday, STRA reported 3Q09 EPS of $1.21, well above our estimate of $1.14 and company’s guidance due to strong marketing efficiencies. Strayer’s 2010 business model (which baselines $9.30-$9.50 EPS for 2010) is above our previous estimates and consensus, suggesting an upward bias for full-year 2010 EPS. Strayer’s 2010 southwestern expansion to four more states (AR, LA, MS, TX) is consistent with the company’s contiguous geographic expansion growth strategy and opens up new markets for the company’s schools.
Growth story continues. Fall enrollment grew 22% y/y (vs. our 21% y/y), while new enrollments (starts) grew 20% y/y (vs. a “tough” comp of 29% last year). Enrollment growth moderately decelerated y/y, but looked healthy sequentially. Interestingly, classroom enrollments grew faster than online enrollments (23% y/y vs. 21% y/y) because of increased campus-based offerings, specifically those designed for new students.
Consistency in execution brings comfort. We are encouraged by STRA’s execution strength, as the company is on track with the 2009 campuses openings (11 campuses) and enhanced its plans to open 13 new campuses in 2010. New Strayer campuses produce measurable ~70% internal rate of return.
Positives included better-than-expected revenue per student growth (5.7% y/y vs. our 5.1% y/y), ~250 bps y/y leverage in selling and promotional expenses (to 24.0% of revenues vs. our 25.7%), and a ~$5 mn share repurchase. 3Q09 Operating margin expanded ~290 bps y/y to 23.8% of revenues (vs. our 22.5%). Other positives included a new $100 mn share repurchase program and increased dividend (from $2.00 to $3.00 per share). Negatives included a three-day rise in DSOs (to 15 days), 80 bps y/y increase bad debt expense (to 4.5% of revenues, inline with our estimate), and 37% y/y decline in 3Q09 free cash flow.
With the sector out of favor, STRA trades toward the low end of its historical P/E range. We raise our 2009 EPS by $0.07 to $7.57 to account for 3Q09 outperformance. We also raise 2010 EPS by $0.15 to $9.45 and introduce 2011 EPS of $11.25. Shares of STRA trade at 21x our 2010 EPS estimate, vs. a group average of 14x. We are comfortable with STRA’s premium valuation, as it reflects superior focus on quality and consistency, lower risk profile, and better control over its prospective growth compared with that of its peers. We establish a y-e 2010 price target of $260 (29% upside), about 23x our new 2011 EPS estimate, approximately in line with the current forward multiple.
Friday, October 30, 2009
Strayer Education: Go Southwest, Young Man; 3Q09 Results/2010 Business Model Underline Consistency
Strayer Education: Go Southwest, Young Man; 3Q09 Results/2010 Business Model Underline Consistency Overweight
Yesterday, STRA reported 3Q09 EPS of $1.21, well above our estimate of $1.14 and company’s guidance due to strong marketing efficiencies. Strayer’s 2010 business model (which baselines $9.30-$9.50 EPS for 2010) is above our previous estimates and consensus, suggesting an upward bias for full-year 2010 EPS. Strayer’s 2010 southwestern expansion to four more states (AR, LA, MS, TX) is consistent with the company’s contiguous geographic expansion growth strategy and opens up new markets for the company’s schools.
Growth story continues. Fall enrollment grew 22% y/y (vs. our 21% y/y), while new enrollments (starts) grew 20% y/y (vs. a “tough” comp of 29% last year). Enrollment growth moderately decelerated y/y, but looked healthy sequentially. Interestingly, classroom enrollments grew faster than online enrollments (23% y/y vs. 21% y/y) because of increased campus-based offerings, specifically those designed for new students.
Consistency in execution brings comfort. We are encouraged by STRA’s execution strength, as the company is on track with the 2009 campuses openings (11 campuses) and enhanced its plans to open 13 new campuses in 2010. New Strayer campuses produce measurable ~70% internal rate of return.
Positives included better-than-expected revenue per student growth (5.7% y/y vs. our 5.1% y/y), ~250 bps y/y leverage in selling and promotional expenses (to 24.0% of revenues vs. our 25.7%), and a ~$5 mn share repurchase. 3Q09 Operating margin expanded ~290 bps y/y to 23.8% of revenues (vs. our 22.5%). Other positives included a new $100 mn share repurchase program and increased dividend (from $2.00 to $3.00 per share). Negatives included a three-day rise in DSOs (to 15 days), 80 bps y/y increase bad debt expense (to 4.5% of revenues, inline with our estimate), and 37% y/y decline in 3Q09 free cash flow.
With the sector out of favor, STRA trades toward the low end of its historical P/E range. We raise our 2009 EPS by $0.07 to $7.57 to account for 3Q09 outperformance. We also raise 2010 EPS by $0.15 to $9.45 and introduce 2011 EPS of $11.25. Shares of STRA trade at 21x our 2010 EPS estimate, vs. a group average of 14x. We are comfortable with STRA’s premium valuation, as it reflects superior focus on quality and consistency, lower risk profile, and better control over its prospective growth compared with that of its peers. We establish a y-e 2010 price target of $260 (29% upside), about 23x our new 2011 EPS estimate, approximately in line with the current forward multiple.
Yesterday, STRA reported 3Q09 EPS of $1.21, well above our estimate of $1.14 and company’s guidance due to strong marketing efficiencies. Strayer’s 2010 business model (which baselines $9.30-$9.50 EPS for 2010) is above our previous estimates and consensus, suggesting an upward bias for full-year 2010 EPS. Strayer’s 2010 southwestern expansion to four more states (AR, LA, MS, TX) is consistent with the company’s contiguous geographic expansion growth strategy and opens up new markets for the company’s schools.
Growth story continues. Fall enrollment grew 22% y/y (vs. our 21% y/y), while new enrollments (starts) grew 20% y/y (vs. a “tough” comp of 29% last year). Enrollment growth moderately decelerated y/y, but looked healthy sequentially. Interestingly, classroom enrollments grew faster than online enrollments (23% y/y vs. 21% y/y) because of increased campus-based offerings, specifically those designed for new students.
Consistency in execution brings comfort. We are encouraged by STRA’s execution strength, as the company is on track with the 2009 campuses openings (11 campuses) and enhanced its plans to open 13 new campuses in 2010. New Strayer campuses produce measurable ~70% internal rate of return.
Positives included better-than-expected revenue per student growth (5.7% y/y vs. our 5.1% y/y), ~250 bps y/y leverage in selling and promotional expenses (to 24.0% of revenues vs. our 25.7%), and a ~$5 mn share repurchase. 3Q09 Operating margin expanded ~290 bps y/y to 23.8% of revenues (vs. our 22.5%). Other positives included a new $100 mn share repurchase program and increased dividend (from $2.00 to $3.00 per share). Negatives included a three-day rise in DSOs (to 15 days), 80 bps y/y increase bad debt expense (to 4.5% of revenues, inline with our estimate), and 37% y/y decline in 3Q09 free cash flow.
With the sector out of favor, STRA trades toward the low end of its historical P/E range. We raise our 2009 EPS by $0.07 to $7.57 to account for 3Q09 outperformance. We also raise 2010 EPS by $0.15 to $9.45 and introduce 2011 EPS of $11.25. Shares of STRA trade at 21x our 2010 EPS estimate, vs. a group average of 14x. We are comfortable with STRA’s premium valuation, as it reflects superior focus on quality and consistency, lower risk profile, and better control over its prospective growth compared with that of its peers. We establish a y-e 2010 price target of $260 (29% upside), about 23x our new 2011 EPS estimate, approximately in line with the current forward multiple.
Thursday, October 29, 2009
Capella Education : Strong Enrollments and Operating Efficiencies in 3Q09 Enhance Outlook
North America Equity Research
Capella Education: Strong Enrollments and Operating Efficiencies in 3Q09 Enhance OutlookNeutral
This morning CPLA reported its 3Q09 EPS of $0.57, well above our estimate and consensus of $0.51, as a result of stronger-than-expected enrollment growth coupled with impressive efficiencies in instructional and marketing costs. We believe CPLA results underline the positive industry backdrop as student interest is abundant, government student loans have been accessible, and pricing increases are sticking.
Enrollments and operating leverage were impressive. Enrollments grew 28% y/y to 30,738, and revenues grew 28% y/y, both above company's guidance. Operating margin expanded ~524 bps y/y to 17.4%, also above our estimates and guidance, primarily due to efficiencies in instructional and marketing costs. Other positives included a $10 million share repurchase and continuing profitability improvements in the bachelor’s level, due to scale.
Higher 4Q09 guidance and reiterated long-term growth goals. Strong 3Q09 performance led to healthy (better-than-expected) 4Q09 guidance and 5-6% higher full-year 2009 EPS guidance. As a result, we expect 200 bps y/y margin expansion in 4Q09 (to 23.6%) and raised our 4Q09 EPS by $0.07 to $0.85.
3Q09 negatives included a continuing (mostly expected) drag in revenue per learner. While 3Q09 revenue per learner grew 0.3% due to favorable colloquia timing, we expect 4Q09 revenue per learner to decline over 2% y/y due to fewer colloquia, mix shift, and lighter course loads. Other modest negatives included 30 bps y/y increase in bad debt (to 2.5%), still one of the lowest in the sector.
Education sector is out of favor. We recognize that education stocks have been out of favor since February due to 1) regulatory/legislative uncertainty and 2) sector rotation away from defensive stocks. We continue to believe that education stocks provide a good balance of growth-defensiveness in a still uncertain economy and will show healthy (albeit much decelerated) growth during an economic expansion due to secular drivers.
We remain Neutral. We raise our 2009 EPS estimate by $0.13 to $2.47, raise our 2010 EPS estimate by $0.15 to $3.12, and introduce 2011 EPS of $3.74. Following a 50%+ rally since May, shares of CPLA trade at 23x our 2010 EPS (vs. 15x for the sector). CPLA’s premium valuation reflects consistent execution and high growth. Our new 2010 price target of $85 (18% upside) suggests 23x our 2011 EPS, approximately inline with the current NTM multiple. We prefer companies with an efficiency turnaround (APOL) or more open-ended growth (STRA).
Capella Education: Strong Enrollments and Operating Efficiencies in 3Q09 Enhance OutlookNeutral
This morning CPLA reported its 3Q09 EPS of $0.57, well above our estimate and consensus of $0.51, as a result of stronger-than-expected enrollment growth coupled with impressive efficiencies in instructional and marketing costs. We believe CPLA results underline the positive industry backdrop as student interest is abundant, government student loans have been accessible, and pricing increases are sticking.
Enrollments and operating leverage were impressive. Enrollments grew 28% y/y to 30,738, and revenues grew 28% y/y, both above company's guidance. Operating margin expanded ~524 bps y/y to 17.4%, also above our estimates and guidance, primarily due to efficiencies in instructional and marketing costs. Other positives included a $10 million share repurchase and continuing profitability improvements in the bachelor’s level, due to scale.
Higher 4Q09 guidance and reiterated long-term growth goals. Strong 3Q09 performance led to healthy (better-than-expected) 4Q09 guidance and 5-6% higher full-year 2009 EPS guidance. As a result, we expect 200 bps y/y margin expansion in 4Q09 (to 23.6%) and raised our 4Q09 EPS by $0.07 to $0.85.
3Q09 negatives included a continuing (mostly expected) drag in revenue per learner. While 3Q09 revenue per learner grew 0.3% due to favorable colloquia timing, we expect 4Q09 revenue per learner to decline over 2% y/y due to fewer colloquia, mix shift, and lighter course loads. Other modest negatives included 30 bps y/y increase in bad debt (to 2.5%), still one of the lowest in the sector.
Education sector is out of favor. We recognize that education stocks have been out of favor since February due to 1) regulatory/legislative uncertainty and 2) sector rotation away from defensive stocks. We continue to believe that education stocks provide a good balance of growth-defensiveness in a still uncertain economy and will show healthy (albeit much decelerated) growth during an economic expansion due to secular drivers.
We remain Neutral. We raise our 2009 EPS estimate by $0.13 to $2.47, raise our 2010 EPS estimate by $0.15 to $3.12, and introduce 2011 EPS of $3.74. Following a 50%+ rally since May, shares of CPLA trade at 23x our 2010 EPS (vs. 15x for the sector). CPLA’s premium valuation reflects consistent execution and high growth. Our new 2010 price target of $85 (18% upside) suggests 23x our 2011 EPS, approximately inline with the current NTM multiple. We prefer companies with an efficiency turnaround (APOL) or more open-ended growth (STRA).
DeVry : Solid 1QF10 Shows Continued Healthy Balance of Growth and Margin Expansion
North America Equity Research
DeVry: Solid 1QF10 Shows Continued Healthy Balance of Growth and Margin ExpansionNeutral
Yesterday, DeVry reported its 1QF10 (Sept) EPS of $0.76, well above our estimate of $0.64 and consensus of $0.66, as a result of the robust revenue growth and efficiencies in student services and administrative spending.
Positives included strong total enrollment growth momentum across most businesses, favorable student persistence, and strong cash flow, and continued impressive margin efficiencies within the Business, Technology and Management (formerly DVU) segment. Negatives included continued cyclical drag from the Professional & Training segment and a negative margin mix due to the USEC acquisition. In addition, management stated that future growth rates are against tougher y/y “comparisons.”
Education sector is out of favor, but strong fundamentals are hard to ignore. We recognize that education stocks have been vulnerable in the last few months due to 1) regulatory/legislative uncertainty and 2) sector rotation away from defensive stocks. We continue to believe that education stocks provide a good balance of growth-defensiveness in a still uncertain economy and will show healthy (albeit much decelerated) growth during an economic expansion due to secular drivers.
Efficiencies are encouraging, but intermediate term margin upside may be limited in our view. We acknowledge that DeVry’s investments will likely decelerate in the next several quarters resulting in a modest margin expansion. We expect ~130 bps y/y margin expansion (to 18.0%) in FY2010, above DV’s historical peak operating margin (of 17%). We appreciate DV’s approach of balancing growth and margin expansion and believe that company's investments should propel solid growth regardless of the economic cycle.
We maintain Neutral rating. We raise our FY10 and FY11 EPS estimates by $0.18 and $0.20 to $3.14 and $3.63, respectively, to account for the healthy enrollment momentum and efficiencies. Following a 40%+ rally since May, shares of DV trade at 17x our CY10 estimate of $3.38, above the group average multiple of 14x. We believe DV’s premium reflects its diversified nature and growth/margin balance. Our new December 2010 PT of $60 implies 17x our FY2011 EPS estimate, approximately inline with the current forward multiple.
DeVry: Solid 1QF10 Shows Continued Healthy Balance of Growth and Margin ExpansionNeutral
Yesterday, DeVry reported its 1QF10 (Sept) EPS of $0.76, well above our estimate of $0.64 and consensus of $0.66, as a result of the robust revenue growth and efficiencies in student services and administrative spending.
Positives included strong total enrollment growth momentum across most businesses, favorable student persistence, and strong cash flow, and continued impressive margin efficiencies within the Business, Technology and Management (formerly DVU) segment. Negatives included continued cyclical drag from the Professional & Training segment and a negative margin mix due to the USEC acquisition. In addition, management stated that future growth rates are against tougher y/y “comparisons.”
Education sector is out of favor, but strong fundamentals are hard to ignore. We recognize that education stocks have been vulnerable in the last few months due to 1) regulatory/legislative uncertainty and 2) sector rotation away from defensive stocks. We continue to believe that education stocks provide a good balance of growth-defensiveness in a still uncertain economy and will show healthy (albeit much decelerated) growth during an economic expansion due to secular drivers.
Efficiencies are encouraging, but intermediate term margin upside may be limited in our view. We acknowledge that DeVry’s investments will likely decelerate in the next several quarters resulting in a modest margin expansion. We expect ~130 bps y/y margin expansion (to 18.0%) in FY2010, above DV’s historical peak operating margin (of 17%). We appreciate DV’s approach of balancing growth and margin expansion and believe that company's investments should propel solid growth regardless of the economic cycle.
We maintain Neutral rating. We raise our FY10 and FY11 EPS estimates by $0.18 and $0.20 to $3.14 and $3.63, respectively, to account for the healthy enrollment momentum and efficiencies. Following a 40%+ rally since May, shares of DV trade at 17x our CY10 estimate of $3.38, above the group average multiple of 14x. We believe DV’s premium reflects its diversified nature and growth/margin balance. Our new December 2010 PT of $60 implies 17x our FY2011 EPS estimate, approximately inline with the current forward multiple.
Friday, October 2, 2009
Gandhi's Birthday Today
Gandhi’s birthday, or Gandhi Jayanti, is celebrated every year as the International Day of Non-Violence. The Mahatma, who was born on 2 October 1869, would have turned 140 this year. Happy Birthday...
Monday, September 28, 2009
Unemployment Favoring For-Profit Schools
Unemployment Favoring For-Profit Schools
http://www.minyanville.com/articles/postsecondary-school-unemployment-minyanville-/index/a/24430
The summer is over, which means beaches are empty and classrooms are crowded. But it isn’t just kids staring dull-eyed at the blackboard: Men and women across the country are also back in school, benefitng for-profit education companies. This is a diverse sector encompassing a wide variety of different institutions such as DeVry (DV), Apollo Group (APOL), ITT Educational Services (ESI), Bridgepoint Education (BPI), Strayer Education (STRA), and Corinthian Colleges (COCO), to name just a few. Online or on campus, these schools teach a wide range of skills including health care, criminal justice, information technology, and construction trades. Investors haven’t been enthusiastic about the sector in recent months, but analysts covering the space argue that there are still reasons for optimism here: Specifically, the labor market is lousy, and some of these stocks are no longer looking as pricy.
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DV 53.92 +0.03 (+0.06%)
APOL 71.07 +0.42 (+0.59%)
ESI 107.65 +1.69 (+1.60%)
STRA 211.98 +1.33 (+0.63%)
COCO 17.86 +0.11 (+0.62%)
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Three Agribusiness Stocks Ripe for the HarvestWill Investors Join the Forced March to Risk?Shanghai's Growth Is StallingJeff Saut: Performance Pressure Weighing on Wall StreetThe G-20 Summit Was a Rerun
Overhyped Products: SegwayUAL Leads Airline Stocks' FlightLessons From the Large CapsBehind General Mills’ Tasty ResultsWhy It's Time to Buy the Money ManagersDuring the market meltdown last year, the stocks of companies offering post-secondary education held up very nicely, notes James Maher, an analyst with ThinkEquity.Investors considered them smart counter-cyclical plays: As the economy tanked, the assumption was that more Americans would enroll in school because they couldn’t find work, or they would be looking to strengthen their resumes with more education. And indeed, enrollment at some of these schools surged. DeVry, for instance, reported solid fourth-quarter and full-year results in August with new student starts and enrollment growth increasing at a double-digit rate for essentially all segments.Compared with the same period last year, overall revenue increased 43% in the quarter and 34% for the year. In late June, Apollo reported that its third-quarter profit jumped 45% as it enjoyed a sizable enrollment increase and a healthy gain in revenue. But now, with all the cable news chatter of looming economic recovery, investors don’t appear as enthralled with these education companies. Stock pickers are rotating out of a sector they consider defensive as they hunt for early cycle winners.Over the past six months, for example, DeVry is up 16% as the broader market has rocketed up nearly 50%. (Over the same period, Apollo is up just 1% while ITT Educational Services is up 1.5%). However, James Maher of ThinkEquity argues that, looking ahead, for-profit schools will continue to enjoy robust enrollment and new student starts. A weak job market will guarantee a continued sizable pool of unemployed men and women looking to head back to the classroom, he thinks. “The recession may be ending, but unemployment isn’t,” Maher tells Minyanville. “That is a lagging indicator. Dig into the unemployment report, and you’ll see that the unemployment rate is substantially higher for those people with just a high school diploma or some college. Those folks will continue to look to bring new skills to their job searches and careers.” Even to those economists that have predicted a return to positive growth in the second half of this year, last Friday’s news on the August employment situation was worrisome.Joseph LaVorgna, Deutsche Bank’s chief US economist, who described the report as very disappointing, noted that the job market has now shrunk every month since January 2008. The economist also pointed out that temp hiring, which tends to lead overall labor demand by anywhere from three to six months, suffered its 19th consecutive monthly decline. There are some concerns when it comes to for-profit schools, analysts note, including credit market turmoil that has made private student loans more difficult for some students to obtain. Another worry: A weakening employment environment may affect job placement rates. “We have seen some lower placement rates from a number of schools,” says Maher. “But here is the other side of that: If you look at today’s job market, which is very difficult, then what is your alternative? You can compete without a degree, or you can seek a degree, and at least have something more to offer.” In terms of specific stock picks in the sector, Maher likes the cash flows at Apollo. “They have been able to do significant share repurchases and, more importantly, they have been able to go out and do some acquisitions. It’s still a growth story.” He also favors American Public Education (APEI), a smaller school that Maher believes is still in its early growth stages. But what'll happen when this economy does eventually recover, and that spooky unemployment rate moderates? Even then, when better times do arrive, analysts argue that for-profit schools will benefit from a broader trend: a secular, long-term shift of Americans pursuing post-secondary education, says Morningstar analyst Todd Young. “You might not see the huge growth rates we have seen over the last couple years, but there will still be solid, probably double-digit growth for most of these companies,” Young tells us. “I think the long-term prospects for the industry are good no matter what the economy does.”Ariel Sokol, an analyst at Wedbush Morgan who covers the sector, also notes that some of these stocks are looking as cheap as ever right now. DeVry, for example, is now trading with a forward P/E multiple of 14 and a price-to-earnings growth ratio of 0.77. (Anything under one represents a potentially good deal). Sokol is telling his clients to put money to work in Grand Canyon Education (LOPE). “They have a traditional ground campus in Arizona, and 50% of their students are graduate school students. They are focused on health care and education -- two areas that will have good growth rates regardless of what the economy does.”
more BUSINESS & MARKETS articles »-->
http://www.minyanville.com/articles/postsecondary-school-unemployment-minyanville-/index/a/24430
The summer is over, which means beaches are empty and classrooms are crowded. But it isn’t just kids staring dull-eyed at the blackboard: Men and women across the country are also back in school, benefitng for-profit education companies. This is a diverse sector encompassing a wide variety of different institutions such as DeVry (DV), Apollo Group (APOL), ITT Educational Services (ESI), Bridgepoint Education (BPI), Strayer Education (STRA), and Corinthian Colleges (COCO), to name just a few. Online or on campus, these schools teach a wide range of skills including health care, criminal justice, information technology, and construction trades. Investors haven’t been enthusiastic about the sector in recent months, but analysts covering the space argue that there are still reasons for optimism here: Specifically, the labor market is lousy, and some of these stocks are no longer looking as pricy.
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DV 53.92 +0.03 (+0.06%)
APOL 71.07 +0.42 (+0.59%)
ESI 107.65 +1.69 (+1.60%)
STRA 211.98 +1.33 (+0.63%)
COCO 17.86 +0.11 (+0.62%)
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Three Agribusiness Stocks Ripe for the HarvestWill Investors Join the Forced March to Risk?Shanghai's Growth Is StallingJeff Saut: Performance Pressure Weighing on Wall StreetThe G-20 Summit Was a Rerun
Overhyped Products: SegwayUAL Leads Airline Stocks' FlightLessons From the Large CapsBehind General Mills’ Tasty ResultsWhy It's Time to Buy the Money ManagersDuring the market meltdown last year, the stocks of companies offering post-secondary education held up very nicely, notes James Maher, an analyst with ThinkEquity.Investors considered them smart counter-cyclical plays: As the economy tanked, the assumption was that more Americans would enroll in school because they couldn’t find work, or they would be looking to strengthen their resumes with more education. And indeed, enrollment at some of these schools surged. DeVry, for instance, reported solid fourth-quarter and full-year results in August with new student starts and enrollment growth increasing at a double-digit rate for essentially all segments.Compared with the same period last year, overall revenue increased 43% in the quarter and 34% for the year. In late June, Apollo reported that its third-quarter profit jumped 45% as it enjoyed a sizable enrollment increase and a healthy gain in revenue. But now, with all the cable news chatter of looming economic recovery, investors don’t appear as enthralled with these education companies. Stock pickers are rotating out of a sector they consider defensive as they hunt for early cycle winners.Over the past six months, for example, DeVry is up 16% as the broader market has rocketed up nearly 50%. (Over the same period, Apollo is up just 1% while ITT Educational Services is up 1.5%). However, James Maher of ThinkEquity argues that, looking ahead, for-profit schools will continue to enjoy robust enrollment and new student starts. A weak job market will guarantee a continued sizable pool of unemployed men and women looking to head back to the classroom, he thinks. “The recession may be ending, but unemployment isn’t,” Maher tells Minyanville. “That is a lagging indicator. Dig into the unemployment report, and you’ll see that the unemployment rate is substantially higher for those people with just a high school diploma or some college. Those folks will continue to look to bring new skills to their job searches and careers.” Even to those economists that have predicted a return to positive growth in the second half of this year, last Friday’s news on the August employment situation was worrisome.Joseph LaVorgna, Deutsche Bank’s chief US economist, who described the report as very disappointing, noted that the job market has now shrunk every month since January 2008. The economist also pointed out that temp hiring, which tends to lead overall labor demand by anywhere from three to six months, suffered its 19th consecutive monthly decline. There are some concerns when it comes to for-profit schools, analysts note, including credit market turmoil that has made private student loans more difficult for some students to obtain. Another worry: A weakening employment environment may affect job placement rates. “We have seen some lower placement rates from a number of schools,” says Maher. “But here is the other side of that: If you look at today’s job market, which is very difficult, then what is your alternative? You can compete without a degree, or you can seek a degree, and at least have something more to offer.” In terms of specific stock picks in the sector, Maher likes the cash flows at Apollo. “They have been able to do significant share repurchases and, more importantly, they have been able to go out and do some acquisitions. It’s still a growth story.” He also favors American Public Education (APEI), a smaller school that Maher believes is still in its early growth stages. But what'll happen when this economy does eventually recover, and that spooky unemployment rate moderates? Even then, when better times do arrive, analysts argue that for-profit schools will benefit from a broader trend: a secular, long-term shift of Americans pursuing post-secondary education, says Morningstar analyst Todd Young. “You might not see the huge growth rates we have seen over the last couple years, but there will still be solid, probably double-digit growth for most of these companies,” Young tells us. “I think the long-term prospects for the industry are good no matter what the economy does.”Ariel Sokol, an analyst at Wedbush Morgan who covers the sector, also notes that some of these stocks are looking as cheap as ever right now. DeVry, for example, is now trading with a forward P/E multiple of 14 and a price-to-earnings growth ratio of 0.77. (Anything under one represents a potentially good deal). Sokol is telling his clients to put money to work in Grand Canyon Education (LOPE). “They have a traditional ground campus in Arizona, and 50% of their students are graduate school students. They are focused on health care and education -- two areas that will have good growth rates regardless of what the economy does.”
more BUSINESS & MARKETS articles »-->
Thursday, September 10, 2009
AVP of Regional Operations LA or San Jose
Title: AVP Regional Operations
Location: Los Angeles or San Jose
Salary: $125k
Benefits: Yes
The Associate Vice President of Regional Operations, provides innovative and visionary leadership for the expansion and growth of regional academic centers and related enrollments. This position will implement existing strategic and tactical programs that will continue to propel National University to become the leader in student enrollment, retention and matriculation. Additionally, develop and implement new and innovative ideas leading to growth in student recruitment and retention. This position directs multiple centers specializing in both on campus and online programs.
Minimum of 10 - 15 years experience required in progressively complex experience in at least one or more of the following fields: management, operations, business or academic administration experience; with at least 10 years of direct staff management experience. A minimum 5-10 years experience in the management of on site or online academic centers preferred. This is both a sales and operations role. Must be able to strategically manage in a multi-campuses, multi-brand environment. Travel 50%
Minimum qualifications are a Bachelors degree from an accredited institution. Masters degree preferred
Email your resume to hshepard@dshefrin.com
Location: Los Angeles or San Jose
Salary: $125k
Benefits: Yes
The Associate Vice President of Regional Operations, provides innovative and visionary leadership for the expansion and growth of regional academic centers and related enrollments. This position will implement existing strategic and tactical programs that will continue to propel National University to become the leader in student enrollment, retention and matriculation. Additionally, develop and implement new and innovative ideas leading to growth in student recruitment and retention. This position directs multiple centers specializing in both on campus and online programs.
Minimum of 10 - 15 years experience required in progressively complex experience in at least one or more of the following fields: management, operations, business or academic administration experience; with at least 10 years of direct staff management experience. A minimum 5-10 years experience in the management of on site or online academic centers preferred. This is both a sales and operations role. Must be able to strategically manage in a multi-campuses, multi-brand environment. Travel 50%
Minimum qualifications are a Bachelors degree from an accredited institution. Masters degree preferred
Email your resume to hshepard@dshefrin.com
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