Plenty of Growth Drivers Remain for Career Education Corp and Corinthian Colleges
November 04 2011 - 8:16AM
Marketwired
Not long ago for-profit school stocks were riding high. Profits
were up, and the Association of Private Sector Colleges and
Universities was touting a Department of Education study that
showed graduates of four-year private sector colleges and
universities were employed in higher percentages than graduates of
public or private non-profit universities. One year later the
entire industry is coming under fire as disappointing earnings and
an inordinate number of student loan defaults has brought the
credibility of the sector way down. The Paragon Report examines
investing opportunities in the Education & Training Services
industry and provides equity research on Career Education
Corporation (NASDAQ: CECO) and Corinthian Colleges, Inc. (NASDAQ:
COCO). Access to the full company reports can be found at:
www.paragonreport.com/CECO
www.paragonreport.com/COCO
The US Department of Education, has certainly changed its tone
this year, and recently came out with a statement saying that 8.8
percent of federal student loans for fiscal 2009 were being
defaulted upon. This figure represents all student loans, including
those for not-for-profit schools. When one considers that the
default rate of for-profit schools was a whopping 15 percent, it is
not surprising to find that much of the Education and Training
Services sector has come under major fire lately.
Iowa Democratic Sen. Tom Harkin also released a report that said
more than half of students at for-profit colleges will drop out in
the first two years, likely with big debts to repay.
The Paragon Report provides investors with an excellent first
step in their due diligence by providing daily trading ideas, and
consolidating the public information available on them. For more
investment research on the Education & Training Services
industry register with us free at www.paragonreport.com and get
exclusive access to our numerous stock reports and industry
newsletters.
With their image and revenue streams in question, many companies
in the sector are reworking their recruitment strategies to try and
offer a more viable and realistic product. Enrollment volumes have
taken a major hit across the board, leading several marquee
for-profit schools to turn to emerging markets for growth. "It
makes sense to go overseas with everything going on in the US
market," says Jeff Silber of BMO Capital Markets. "The overseas
market is about 8 times larger, with the college participation rate
well below the U.S. in many areas, so there are lots of
opportunities."
Corinthian Colleges Inc. said that it moved to a loss in its
fiscal first-quarter, burdened by impairment and severance charges.
Corinthian said that new student enrollment growth fell during the
quarter due to economic conditions, tuition increases and its
decision to lower the risk profile of its students. Corinthian
predicts that the rate of year-over-year enrollment declines will
slow significantly in the second quarter and improve during the
last half of the fiscal year.
Shares of Career Education Corporation collapsed this week after
the company said that an independent investigation found its job
placement practices improper at certain health education and art
and design schools. A probe into these practices began because of a
subpoena from New York's attorney general.
The Paragon Report has not been compensated by any of the
above-mentioned publicly traded companies. Paragon Report is
compensated by other third party organizations for advertising
services. We act as an independent research portal and are aware
that all investment entails inherent risks. Please view the full
disclaimer at http://www.paragonreport.com/disclaimer
Add to Digg Bookmark with del.icio.us Add to Newsvine
CECO Environmental (NASDAQ:CECO)
Historical Stock Chart
From Aug 2024 to Sep 2024
CECO Environmental (NASDAQ:CECO)
Historical Stock Chart
From Sep 2023 to Sep 2024