Log In

ESI: Robbing Peter to Pay Paul in a Race to the Bottom

July 26th, 2013

In a vacuum, there might be legitimate cause for excitement.  After 11 consecutive quarters during which ESI reported a YOY decline in new student starts the company was finally able to identify an elixir to its enrollment woes – aggressive tuition discounting...

READ MORE >

For-Profit EDU: Just When You Think You Have All of the Answers, We Change the Questions; Feedback from Privately Held...

July 24th, 2013

“And you all know how the story go….Not bad meaning bad but bad meaning good…”-          Run-DMCWith all due respect to Monsieurs Simmons, McDaniels, and Mizell we doubt that they...

READ MORE >

For-Profit EDU: Has a New Legal Precedent Been Established For Institutions? A Recent CECO Case Warrants Closer...

June 19th, 2013

Earlier this week, the American Arbitration Association ruled on a dispute between a former student of CECO’s California School of Culinary Arts (since rebranded the Le Cordon Bleu College of...

READ MORE >

ESI: The Latest 90/10 Compliance Strategy/”Work Around” – Charter Schools and Free Associate’s Degrees

June 12th, 2013

In a move that received little fanfare this past February, ESI’s board of directors established a short term element to the company’s compensation policy for senior management that could be payable in...

READ MORE >

ESI: The Absurdity of Reported “Earnings” As FCF Collapses and Balance Sheet (Off and On) Obligations Loom Large

April 26th, 2013

How much are 400-600 ITT Tech students worth?  In a report in which we will outline some of the critical questions surrounding ESI, this is the question we have been pondering all day.  Afterall, it...

READ MORE >

ESI: 10-K Highlights – the SEC Subpoena Is Not the Sole Cause for Concern

February 25th, 2013

We have little doubt that among the kernels of information included in ESI’s 2012 10-K filing that the disclosure of the subpoena from the SEC will receive the greatest attention – as it should.  However, for anyone who has followed the...

READ MORE >

ESI: And So It Begins…. What Do You Believe?

January 25th, 2013

Who said volatility is dead?  In a day that will go down in infamy for ESI investors, the stock traded in an astounding 40%+ range today.  After gaping down in excess of 20% in early trading ESI shares rebounded over the course of the day to close up 17.7% - efficient...

READ MORE >

ESI: The True Nature of ESI’s Educational Outcomes Finally Coming to Light, Liquidity Position Looks Tenuous, Taking...

January 6th, 2013

If you were to distill our short thesis on ESI into its central elements (which we’ve now had in place for almost four years now) it can be succinctly summarized in two points: 1. The company’s...

READ MORE >

ESI: After The Worst Fall Term Enrollment Intake in ESI’s History, It’s Clear the Emperor Has No Clothes, Taking...

October 25th, 2012

Losing Altitude and Gaining Speed…..At the simplest level, here are the five things that you need to know about ESI following the company’s 3Q12 earnings release and fall term enrollment...

READ MORE >

For-Profit EDU: Checks with Privately Held Institutions Suggest We’re On the Cusp of Yet Another Round of Meaningful...

October 15th, 2012

On Tuesday, October 16th APOL will kick-start the earnings season in the for-profit postsecondary education sector.  Investor expectations for the company’s results, particularly surrounding new...

READ MORE >

ESI: More Correspondence with the SEC, but It’s not related to the Off-Balance Sheet Treatment of PEAKS

September 25th, 2012

More Correspondence with the SEC….We just wanted to flag a round of correspondence between ESI and the SEC that occurred in July and August of this year.  The letters were just released through the SEC’s...

READ MORE >

ESI: Where Did the Cash Go? ESI’s Leverage Looms Large as Prospective FCF Generation Dwindles, Reducing Target to $30

July 26th, 2012

Fundamentals Are Breaking Down…. And Liquidity Now Becomes a Real ConcernFor some the 2Q12 earnings season will be remembered as the quarter in which the publicly traded for-profit postsecondary...

READ MORE >

For-Profit EDU: Checks with Privately Held Institutions Suggest Trends Are Not Getting Better; Be Wary of the 150%...

July 24th, 2012

Make no mistake, as we navigate earnings season in the for-profit education space over the next 2-3 weeks, the poor operating results from DeVry will look like an accurate gauge of the operating...

READ MORE >

For-Profit EDU: The CFPB Frames the Private Student Lending Industry

July 20th, 2012

Early this morning, the Consumer Financial Protection Bureau (CFPB) released its long awaited report on the Private Student Loan (PSL) industry.  The report provides a broad overview of the characteristics of the private student loan market for the...

READ MORE >

My Interview in Barron's

July 1st, 2012

In case you missed it, I recently had the opportunity to speak with Leslie Norton of Barron's about PAA Research, our approach to idea generation, and some of our latest thoughts on for-profit education, payment processing and OPEN, Z, BGG, and TTC.  You can find the full interview HERE.

READ MORE >

For-Profit EDU: Another Log on the Fire? The Pell Grant Party Might Be Over

June 20th, 2012

There is little doubt that the for-profit postsecondary education sector has been under siege for the past 2-3 years.  Most stocks in the space are trading at or near their 52-week lows and at valuations most investors and management teams in...

READ MORE >

ESI: Running Out of Bullets? The EPS Beat Means Little in the Context of Weakening Student Metrics and Evaporating FCF

April 26th, 2012

It’s True They Did Beat, But….ESI reported 1Q12 revenue and EPS results that were significantly better than consensus estimates.  Despite the overall outperformance, there are CLEAR signs now that...

READ MORE >

For-Profit EDU: As Some Try to Celebrate “Less Worse” Metrics, Starts Deteriorate and a Fundamental Inflection...

April 24th, 2012

Today the 1Q12 earnings season in the for-profit postsecondary education sector kicks off in earnest.  Thus far, many of the 12 issues that we thought would matter most this year have weighed...

READ MORE >

ESI: Why Did ESI Get a New Credit Facility? Revisiting Our Daisy Chain of Events

March 28th, 2012

If we have learned anything over the past 12 years in which we have been following ESI as analysts and investors it is this: never underestimate the guile of the company’s management team, particularly when it comes to crafting...

READ MORE >

ESI: 4Q11 EPS Beat Belies Significant Operational Red Flags

January 26th, 2012

It’s True They Did Beat, But….ESI reported 4Q11 revenue and EPS results that were significantly better than consensus estimates.  Despite the overall outperformance, many of the critical underlying metrics the company reported were weak and/or should...

READ MORE >

For-Profit EDU: Will Winter Term/4Q11 Results Represent an Inflection Point for the Industry? Checks with Private...

January 25th, 2012

Yesterday we published a lengthy report that outlined the 12 issues that we think will have the greatest impact on the enrollment, revenue, EPS and stock sentiment of the publicly traded for-profit...

READ MORE >

For-Profit EDU: As the Focus Turns To “Brand and Price”, The 12 Issues That Will Matter Most in For-Profit...

January 24th, 2012

Perhaps it happens every year, but the relative outperformance of last year’s losers compared to the prior year’s winners has been particularly pronounced thus far in 2012.  The 25 worst...

READ MORE >

ESI: 3Q11 EPS Beat, Overshadowed by Balance Sheet Issues, Weakening Free Cash Flow

October 20th, 2011

ESI reported inline revenues and a healthy 3Q11 EPS beat.  New student starts and total enrollments were both better than our expectations, but still showed weakening trends on a 2-year stacked basis.  There are some in the sell-side...

READ MORE >

For-Profit EDU: More of the Same, Checks with Private Institutions Suggest Primary Fundamental Issues Likely Remained...

October 17th, 2011

What a difference a few months can make.  To put the performance of the publicly traded for-profit postsecondary education companies in perspective for the past few months, we thought it might be...

READ MORE >

For-Profit EDU: More Details Emerge on the Extent of Online Fraud Rings, APOL Outlines Its Exposure

October 11th, 2011

In an article on Insidehighered.com today entitled “Hitting Hard at Fraud”, more details on the extent of online fraud rings in higher education have emerged.  As a reminder, two weeks ago, the Department of...

READ MORE >

For-Profit EDU: Highlights from Our Conference Call with a Representative from an Influential Consumer Advocacy Group

October 5th, 2011

Earlier today PAA Research hosted a conference call with Deanne Loonin of the National Consumer Law Center, one of the best known and most influential non-profit consumer advocacy organizations in the...

READ MORE >

REMINDER: For-Profit EDU - TODAY at 2:30PM EST, PAA Research Conf. Call with Deanne Loonin of the National Consumer Law...

October 5th, 2011

PAA Research will host a conference call TODAY at 2:30PM ET with Deanne Loonin of the National Consumer Law Center, one of the best known and most influential non-profit consumer advocacy...

READ MORE >

REMINDER THIS WED: For-Profit EDU, Wed. 10/5 at 2:30PM, PAA Research Conf. Call with Industry Expert on Student Loans...

October 3rd, 2011

PAA Research will host a conference call at 2:30PM ET Wednesday October 5th with Deanne Loonin of the National Consumer Law Center, one of the best known and most influential non-profit consumer...

READ MORE >

For-Profit EDU: OIG Report on Online Fraud Rings Could Have Serious Implications for the Sector

September 29th, 2011

Earlier this week, the Department of Education’s Office of Inspector General published an investigative program advisory report on “Online Education Fraud Rings”.  The report was sent to Federal Student Aid (FSA) and...

READ MORE >

INVITE: For-Profit EDU, Wed. 10/5 at 2:30PM, PAA Research Conf. Call with Industry Expert on Student Loans and the...

September 26th, 2011

PAA Research will host a conference call at 2:30PM ET Wednesday October 5th with Deanne Loonin of the National Consumer Law Center, one of the best known and most influential non-profit consumer...

READ MORE >

Scroll to load more

Current Ideas

HCG.TO

SHORT

$0

AYI

SHORT

$129

RON.TO

SHORT

$9

BIG

SHORT

$28

ESI

SHORT

$0

DV

SHORT

$15

BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

PAIR - LONG BGG/SHORT TTC

25%

Z

SHORT

$14.00

NA.TO

SHORT

$22

ING.PA

SHORT

$35

ZU

SHORT

$15

TRLA

SHORT

$20

MCRS

SHORT

$31

APOL

SHORT

$35

OPEN

SHORT

$30

BCO

LONG

$35

WWE

LONG

$25

KNL

PAIR - LONG KNL/SHORT MLHR

25%

XOXO

LONG

$20

CSGP

SHORT

$100

GCA

LONG

$8

IPSU

LONG

$20

MLHR

SHORT

$22

ARC

LONG

$12.50

LOOP

PAIR - LONG CSGP/SHORT LOOP

40%

THQI

LONG

$35

WPO

SHORT

$275

COCO

SHORT

$0

HNI

SIG

RGR