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For-Profit EDU: Why the Amended Complaint Against DV Might Be Worth Reading

March 8th, 2011

From what we can gather, few investors if any have paid close attention to the progress of the various securities class action suits filed against almost every one of the publicly traded for-profit postsecondary education companies.  We are...

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ESI: 10-K Observations and Plenty of Lingering Questions

February 21st, 2011

Call us crazy, but we have been eagerly anticipating the release of ESI’s 10-K filing for several weeks now.  The company finally released its 2010 10-K filing on Friday, 2/18/11 after the market close.  We have to admit, we are somewhat disappointed.  On...

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Winners and Losers from the FY08 3-Year CRD Data – The Usual Suspects

February 4th, 2011

The Department of Education released “trial” 3-year cohort default rate data this morning on an national level and institution by institution basis. Before we get into a discussion of the national level data and some of our findings on a school...

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For-Profit Education: 4Q10 FAFSA Data Confirms Enrollment Slowdown Across ALL of Higher Education

January 24th, 2011

Today the US Department of Education released data on the number of Free Applications for Federal Student Aid (FAFSA) submitted during 4Q10-11 (calendar fourth quarter of 2010).   In our view the FAFSA data provided by...

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For-Profit Postsecondary Education: Checks with Private Institutions Indicate STRA Was Not an Anomaly, the Slowdown Is...

January 19th, 2011

For an industry that has distinguished itself in the equity markets as a consistent source of trading opportunities, the “whip-saw” action in the for-profit education sector in the first few...

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ESI: Thoughts on Upcoming 4Q10 Results, Winter Term Enrollment

January 18th, 2011

Before we get into our discussion of our expectations for ESI's upcoming 4Q10 earnings results we wanted to highlight a few changes that we have made to our publishing process that should result in an improved experience for you, our valued...

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For-Profit Education: What is "It"? The Implications of STRA's Pre-Announcement and APOL's Upcoming Earnings Release

January 10th, 2011

At the risk of dating ourselves, we couldn't help but think of Faith No More's edgy rock tune from the late 1980's "Epic" when STRA's negative pre-announcement hit the tape late Friday afternoon."What is...

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ESI: SEC Correspondence Suggests Heightened Scrutiny of Accounting Treatment of PEAKS

November 30th, 2010

We want to eliminate any potential confusion immediately: As far as we know, ESI is not currently subject to an investigation from the SEC. It is not uncommon for the SEC's Division of Corporate Finance to issue comments on a...

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Implications of Explosive Keyword Price Inflation on the For-Profit Education Sector

November 23rd, 2010

Over the past several months there has been a growing bifurcation in the for-profit postsecondary education industry between those companies that have enacted significant "self regulation" measures in order to improve compliance with...

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3Q10 FAFSA Volumes Provide Further Confirmation That Enrollment Trends Are Rolling Over

October 26th, 2010

Over the past few weeks, three large, publicly traded for-profit postsecondary education companies reported earnings.  The general feedback from each company (APOL, CPLA, and ESI) has been fairly similar: 1) new student starts have...

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ESI: Please Help Us Answer A Few Questions, Examining ESI's Leverage

October 26th, 2010

Long time followers of our research know that we have been bearish on the earnings prospects and consequently the share price potential of ESI for quite some time. In light of our views on the stock, it shouldn't come as a huge surprise that our...

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ESI: Key Observations from 3Q10 Results, the Higher Education "Moonshot" Appears to be Over

October 21st, 2010

ESI's third quarter results and fall term enrollment intake add further credence to our argument that the higher education "moonshot" in demand has come to an end.  Below we discuss some of our key observations from the...

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ESI: Our Estimates

October 20th, 2010

ESI will release 3Q10 earnings tomorrow morning and host a conference call at 11AM.  We wanted to make sure all of our subscribers had our estimates heading into the earnings release.  Here are our key assumptions. THEY DO NOT INCLUDE THE POTENTIAL IMPACT OF GAINFUL EMPLOYMENT.Fall Term Intake We...

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The Credit Hour Issue Escalates

October 18th, 2010

For the past 6-7 months we have argued that the definition of a credit hour could become a significant regulatory issue in the higher education space, one that has generally overlooked by most investors.  As a reminder, upon the passage of NegReg 2009 the Department of Education will...

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A View from Privately Held For-Profit Postsecondary Education Institutions - Here Comes the Enrollment Slowdown

October 8th, 2010

Investing in the for-profit education sector over the past 2-3 months has been almost entirely about one's ability to tap into various DC lobbying groups, read the "tea leaves" from public statements from...

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