For-profit U.S. colleges attract investor interest
- Record-setting rally pushes on as S&P ends week up 3 percent
- Trump's Cohn Pick Most Bullish Sign Yet for Banks - Cowen
- Unusual 11 Mid-Day Movers: (IDXG) (INVN) (EBS) Higher; (SCON) (DTEA) (DLTH) Lower (more...)
- 21st Century Fox (FOXA) offers to acquire Sky for GBP10.75/share
- Coca Cola (KO) Announces James Quincey to Succeed Muhtar Kent as CEO; Kent to Continue as Chairman
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
By Sinead Carew
(Reuters) - Investors appear to be giving another look at the beleaguered for-profit education industry as shares of Strayer Education Inc (NASDAQ: STRA) and Capella Education Co (NASDAQ: CPLA) rise on improving financial results.
Shares of Strayer gained 13.9 percent after it reported quarterly results on Wednesday, and Capella shares were up 4 percent on Wednesday, on top of a 12 percent gain after it reported results on Tuesday.
The entire sector has struggled since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates. ITT Educational Services
However, Strayer and Capella have managed to find a way to cope with regulatory constraints and differentiate themselves in the highly competitive market, according to analysts.
"Within the carnage of the sector there are companies performing well this year. For value oriented investors there's an interesting opportunity," said Piper Jaffray analyst Peter Appert.
Strayer reported third-quarter adjusted earnings per share of 27 cents, beating expectations of 22 cents. BMO Capital markets analyst Jeffrey Silber attributed the beat to a 13 percent increase in new enrollments and said this was its fastest enrollment growth since 2010.
While Capella's new enrollments weakened, Silber raised his earnings per share estimate for the company as its outlook for profit margins and revenue improved.
Both Silber and Appert cited Grand Canyon Education Inc (NASDAQ: LOPE) as another company that has been doing well despite the sector's troubles. Grand Canyon reports results on Nov. 2.
Its shares are up 4 percent year-to-date, while Strayer shares have fallen 21.7 percent and Capella shares have risen 46.7 percent.
Shares of American Public Education Inc (NASDAQ: APEI), which reports results on Nov. 7, were up 2.7 percent on Wednesday, adding to an 8 percent gain for the year. DeVry Education Groupm Inc (NYSE: DV), whose shares were up 1.8 percent on Wednesday, reports on Nov. 1.
"Positive results from two companies, two days in a row … practically a record in this industry," said Piper Jaffray's Appert. "If we see similar trends at some of the others perhaps we’ll see a pick-up in investor interest. Too soon to call a trend at this point."
(Reporting By Sinead Carew; Editing by Steve Orlofsky)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- BMO Capital Cuts Price Target on Cooper Cos. (COO) Following 4Q Results
- MKM Partners Raises Price Target on Broadcom Ltd. (AVGO) to $207 Following 4Q Beat
- Oppenheimer Raises Price Target on CarMax (KMX) to $72 Ahead of 3Q
Create E-mail Alert Related CategoriesAnalyst Comments, General News, Reuters
Related EntitiesPiper Jaffray, BMO Capital, Earnings, Peter Appert
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!