Shares of Apollo (APOL) Down as Barron's Says Stock is Overbought

Shares of Apollo Group (Nasdaq: APOL) are trading lower this morning on the back of a bearish Barron's article which is being highlighted as the publications top piece today. Apollo most recently traded at $85.09, down 0.7% from yesterday's close.

The article argues that Apollo investors have run the stock up to unjustified levels on the assumption that the hundreds of thousands of newly unemployed will race back to schools in anticipation of an eventually turning economy. While this thesis may be true, Barron's points out that the stock, now trading around 21.6x forward estimates, is looking somewhat overvalued.

Barron's also mentions such negatives as:

• recent selling by Apollo's Chairman
  
• an aversion by the Obama administration to promoting for-profit educational organizations
  
• a student population which is skewed heavily towards associate degrees rather than bachelors or masters programs. Growth in this segment, however, is down from last year and given "161,800 associate degree students as of November, the amount of new students the company can enroll in coming quarters starts to run up against tough comparisons to prior growth."
  
• a greater default risk for associate degree students

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