For-Profit Education Stocks Surged: 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 educators moved to the head of the class today, with Corinthian Colleges (NAS: COCO) leading the way with a gain of as much as 44%.
So what: For-profit schools will take good news wherever they can get it these days, and today it came in the form of Corinthian's fiscal second-quarter earnings report. Revenue for the quarter decreased 14% from the same quarter of the prior year, while the total student population declined 10%. Excluding impairment charges, diluted earnings per share were $0.04 versus $0.23 a year ago.
Revenue edged out analysts' expectations, while the per-share profit tally was significantly better than the $0.01 that Wall Street was looking for.
Now what: Fellow for-profit educators took the cue from Corinthian and were rallying as well. Career Education (NAS: CECO) was up as much as 11% today, while Strayer (NAS: STRA) , DeVry (NYS: DV) , and ITT Educational Services (NYS: ESI) were also tacking on gains. The sector as a whole has been under a cloud as the government has cracked down on certain practices, including the way the schools recruit students. Today, investors may be seeing Corinthian's second quarter -- and maybe moreso its sanguine view of the upcoming quarter -- as a sign that the industry is starting to rebound and rebuild and that a resumption of growth is in the lesson plan for the year ahead.
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At the time this article was published Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
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