Barclays on U.S. Education Services: Conference Takeaways on Ed Stocks
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Rating Summary:
2 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 4 | New: 2
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Barclays on U.S. Education Services: Conference Takeaways on Ed Stocks
Barclays analyst, Gary E. Bisbee, said, "Over the last two days, we hosted more than 20 leading education and business services companies at the Barclays Capital Global Services Conference in Boston...While the level of new information so soon after quarterly earnings season was predictably low, we enjoyed the opportunity to sit through presentations from 11 education companies and two education industry observers..."
The following four themes jumped out at us across the many presentations: 1) Focus on "Quality". One common theme was the focus across the industry on improving the quality of student outcomes, which we believe every company is
pursuing at different levels; 2) Enrollments. The presentations supported our view that enrollments at campus based and vocational programs are performing somewhat better (or less bad) than online and working adult programs. We also believe that programs serving a greater mix of traditional younger students (Education Management (Nasdaq: EDMC), and to lesser extent Lincoln Educational Services (Nasdaq: LINC) and Universal Technical Institute (NYSE: UTI)) are best positioned today as those students are more stable and less impacted by factors including the economy, reputation damage, etc.; 3) Diversification Is Important...We continue to believe that broad diversification is an attractive quality for several companies in the industry, including DeVry (NYSE: DV), EDMC, and Career Education (Nasdaq: CECO); 4) So Are Systems and Data. We believe that investors are going to increasingly focus on how long the transition period for the industry to compliance with changing regulations and higher quality outcomes will be, and which companies can achieve this new state more quickly."
Barclays analyst, Gary E. Bisbee, said, "Over the last two days, we hosted more than 20 leading education and business services companies at the Barclays Capital Global Services Conference in Boston...While the level of new information so soon after quarterly earnings season was predictably low, we enjoyed the opportunity to sit through presentations from 11 education companies and two education industry observers..."
The following four themes jumped out at us across the many presentations: 1) Focus on "Quality". One common theme was the focus across the industry on improving the quality of student outcomes, which we believe every company is
pursuing at different levels; 2) Enrollments. The presentations supported our view that enrollments at campus based and vocational programs are performing somewhat better (or less bad) than online and working adult programs. We also believe that programs serving a greater mix of traditional younger students (Education Management (Nasdaq: EDMC), and to lesser extent Lincoln Educational Services (Nasdaq: LINC) and Universal Technical Institute (NYSE: UTI)) are best positioned today as those students are more stable and less impacted by factors including the economy, reputation damage, etc.; 3) Diversification Is Important...We continue to believe that broad diversification is an attractive quality for several companies in the industry, including DeVry (NYSE: DV), EDMC, and Career Education (Nasdaq: CECO); 4) So Are Systems and Data. We believe that investors are going to increasingly focus on how long the transition period for the industry to compliance with changing regulations and higher quality outcomes will be, and which companies can achieve this new state more quickly."
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