Career Education's Shares Dropped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of for-profit trade school operator Career Education (NAS: CECO) could use a guidance counselor after falling as far as 16.8% today on tremendous volume.

So what: This is not a good week for Career Education's shareholders. The stock was absolutely demolished yesterday on the heels of a bad earnings report, and now analyst firms Wunderlich and William Blair pile on with a pair of downgrades. All told, shares have dropped by a heart-stopping 54% in just two days.

Now what: You know it's bad when analysts see less value in your stock after a sudden 48% plunge. Curiously, investors haven't seen any need to learn any lessons about the industry from this collapse: Strayer Education (NAS: STRA) , Corinthian Colleges (NAS: COCO) , and Education Management (NAS: EDMC) are all trading blithely sideways or even up as Career Education burns. If the industry struggles hard enough to make CEO Gary McCullough turn in his badge, I'd expect the dominoes to start falling soon enough. Keep a close -- and wary -- eye on this sector, Fool.

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At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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