Light at the End of the Tunnel for Apollo Group?

March 5, 2013 by Jon C. Ogg

educationIt was just in recent days that we saw Apollo Group Inc. (NASDAQ: APOL) warn in an SEC filing that its regulator and accreditation board put the company’s prior “notice” status to a formal probation status. The move also affected a college other than the University of Phoenix.

While things continue to be very rough here for this for-profit online educator, one analyst is looking through the tea leaves and sees some light at the end of the tunnel.

Deutsche Bank has raised its analyst rating to a somewhat cautious Hold from a prior Sell rating. We would note that most traders and investors consider a Hold rating in negative light, but that is not the case when the upgrade involves removing a formal Sell rating.

The firm has talked about a distressed valuation over enrollment and placement issues, as well as the ongoing regulatory reviews. Deutsche Bank is not exactly calling for improvement. The firm’s take is that there is limited downside as of now, even if the enrollments continue to decline.

As this is a Hold rating, the price target is immaterial. It is always interesting when a brokerage firm tries to call a bottom after a highly extended period of negative trends. It also requires for investors and traders to recall one caveat about a light at the end of a tunnel. Sometimes that light is truly the end of the tunnel. Sometimes that light is a freight train headed your way.

Apollo Group shares are up 5.8% at $17.154 on the upgrade today, against a 52-week trading range of $15.98 to $43.80.

Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.