4-Star Stocks Poised to Pop: Capella Education
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, for-profit college operator Capella Education (NAS: CPLA) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Capella's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Minneapolis (1991)|
|Market Cap||$490.5 million|
|Trailing-12-Month Revenue||$434.8 million|
|Management||Chairman/CEO J. Kevin Gilligan, CFO Steven Polacek|
|Return on Equity (Average, Past 3 Years)||29.6%|
|Cash/Debt||$138.5 million / $0|
|Competitors||Apollo Group (NAS: APOL) , Strayer Education (NAS: STRA)|
Sources: S&P Capital IQ and Motley Fool CAPS.
Earlier this week, robertshrestha listed several of Capella's positives: "Relatively low student default rates, lots of growth potential online, solid position in industry, unfairly beaten down. Lots to like here."
In fact, Capella currently sports a cheapish P/E of 9.3. That represents a discount to industry peers like Apollo (11.2), Strayer (10.3), and New Oriental Education & Technology (NYS: EDU) (29.9).
CAPS member buffetfisherftw elaborates on the bargain opportunity:
Significantly under-priced due to overreactions about regulation. Currently priced in the low 30's, and worth every bit of $100/share. This is one of the best managed online educators, and has a wide moat with its focus on graduate degrees. Additionally, this sector has much room to grow as adults slowly realize for-profits can provide better education for less money than traditional schools.
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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of New Oriental Education. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.