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For-Profit EDU: A Few Thoughts on Obama’s Free Community College Initiative

January 9th, 2015

Sorry we didn't pass along some feedback sooner, but we wanted to share a few key data points and thoughts on Obama's proposal to make community college free for students that maintain a 2.5 GPA.  The program is largely modeled on one...

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DV: “History Doesn’t Repeat Itself, but It Often Rhymes”; DV’s Golden Goose Is About to Get Squeezed, Time to...

November 20th, 2014

This oft quoted aphorism (incorrectly attributed to Twain) represents one of the greatest truisms for any seasoned investor: the ability to identify trends and map them to historical patterns is a...

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For-Profit EDU: The Career College Crisis of Summer 2014; Checks Suggest Continued Weakness in Fundamentals – Where...

July 28th, 2014

“The cheaters usually get caught--just never soon enough. Plenty more heads will roll.” Anonymous executive in the for-profit education space Given our longstanding bearish stance on...

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For-Profit EDU: Don’t Expect to See Any “Greenshoots” In the Space This Spring

April 23rd, 2014

Here we are on the eve of another earning season in the for-profit education space and it appears that all of the challenging trends the group faced for the Winter term still remained firmly entrenched during the Spring enrollment...

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For-Profit EDU: The Hope for Hope Trade Could Be Coming To an End as Winter Term Enrollment Results Bring a Cold Dose...

January 29th, 2014

The for-profit postsecondary education sector has been a “contrarian’s delight” for the better part of 12-months.  Initially what started as a long trade predicated on overly bearish sentiment...

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For-Profit EDU: The Stocks Have Been Telling Us For the Past 6-Months That the Fall Term Enrollment Intake Would...

October 22nd, 2013

“It’s real the pain you feel, you trust, you must confess Is someone getting the best, the best, the best of you?”-          Foo FightersOften wrong, never in doubt…. If we could use...

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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...

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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...

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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...

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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...

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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...

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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.

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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...

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APOL: Closing Out Our Short Idea with a 32% Gain (vs. S&P 500 +11.3%), Core Thesis Remains Intact

May 8th, 2012

On 12/15/11 we introduced APOL as a short idea (see “The Monster is Out of the Cage and APOL’s Secular Decline Begins in Earnest”).  Our thesis at that time was predicated on the following: Demographic trends were...

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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...

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APOL: Struggling to Find Its Way in the Era of Brand and Price, Staying Short

March 27th, 2012

The statistics in many respects are simply overwhelming.  Consider the following: More than 700,000 students have now graduated from the University of Phoenix Stated another way, 1 in roughly 450 Americans has a degree from the...

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APOL: Management Has No Visibility, Lowering Estimates

February 29th, 2012

Approximately 3-months ago we published a report entitled: “The Monster Is Out of the Cage and APOL’s Secular Decline Begins in Earnest” in which we outlined our short thesis for APOL.  Below we quickly review the principal tenets of the secular short case...

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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...

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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...

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APOL: A Question of Amplitude and the Eight Other Issues that Matter Most, Staying Short

January 6th, 2012

APOL reported 1Q12 enrollment and earnings results that on the surface, at least looked like exactly what bulls on the stock were hoping for.  To quickly review: The company posted slight revenue upside and beat on EPS by a...

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APOL: The Monster Is Out of the Cage and APOL’s Secular Decline Begins in Earnest

December 15th, 2011

It used to be something that operators in the for-profit postsecondary education space could joke about with investors.  When asked what would represent the biggest competitive threat to their enrollment growth prospects, 5-years ago...

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Current Ideas

KNSL

SELL/SHORT

$230

FRPT

SELL/SHORT

$55

BYON

LONG

$70

EXPI

SELL/SHORT

$4

HUSQ.B

SELL

$50

UFPI

SELL/SHORT

$45

TREX

SHORT

$18

PRDO

SELL/SHORT

$5

STRA

SELL/SHORT

$42

CWH

LONG

$75

CM

SELL/SHORT

$50

RY

SELL/SHORT

$50

ARC

LONG

$5.50

AYI

SHORT

$50

BIG

SHORT

$28

WWE

LONG

$65

XOXO

LONG

$37

RLGY

PAIR TRADE

$10

RDFN

PAIR TRADE

$30

BCO

LONG

$35

ING.PA

SHORT

$35

TRUP

SELL/SHORT

$10

CTC

SHORT

$101

ATGE

SHORT

$15

HCG.TO

SHORT

$0

RON.TO

SHORT

$9

ESI

SHORT

$0

BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

PAIR - LONG BGG/SHORT TTC

25%

Z

SHORT

$14.00

NA.TO

SHORT

$22

ZU

SHORT

$15

TRLA

SHORT

$20

MCRS

SHORT

$31

APOL

SHORT

$35

OPEN

SHORT

$30

KNL

PAIR - LONG KNL/SHORT MLHR

25%

CSGP

SHORT

$100

GCA

LONG

$8

IPSU

LONG

$20

MLHR

SHORT

$22

LOOP

PAIR - LONG CSGP/SHORT LOOP

40%

THQI

LONG

$35

WPO

SHORT

$275

COCO

SHORT

$0

HNI

SIG

RGR