24/7 Wall St. » BPI

Expected Price Gains at For-Profit Education Companies (APOL, EDMC, APEI, STRA, DV, WPO, COCO, BPI, LOPE, CECO)

Paul Ausick — Tue, 01 Nov 2011 20:06:57 +0000

Share prices at for-profit education companies peaked in June and July this year, following a slow start. At the beginning of the year there was widespread fear that new federal rules related to student loans, recruiting practices and employment upon graduation would eviscerate revenues and earnings. However, the rules changes were less onerous than anticipated, and stock prices gradually climbed back up. Enrollments are still a problem at some schools, but share prices are well above lows at most of the companies.

The ten companies we have looked at are Apollo Group (NASDAQ: APOL), Education Management (NASDAQ: EDMC), American Public Education (NASDAQ: APEI), Strayhorn Education (NASDAQ: STRA), DeVry (NYSE: DV), Washington Post (NYSE: WPO), Corinthian Colleges (NASDAQ: COCO), Bridgeport Education (NYSE: BPI), Grand Canyon Education (NASDAQ: LOPE), and Career Education (NASDAQ: CECO).

All data is from Yahoo! Finance, and current share prices were gathered in the mid-afternoon today.

Apollo Group has a median target price of $53.00 from 15 brokers. Shares are trading today at $46.09, for an implied gain of $6.91, or 15%. Apollo’s forward P/E is 12.72 and the company does not pay a dividend. The stock’s 52-week trading range is $33.75 to $54.23, and at today’s price that is about 37% above its 52-week low and 15% below the 52-week high. The company reported better-than-expected quarterly earnings a couple of weeks ago and jumped more than 10% in a day. But lower enrollments plague the company, which has managed to keep revenue up by raising tuition and fees.

Education Management has a median target price of $20.00 from 11 brokers. Shares are trading today at $20.48, about 0.5% above the target price. Education Management’s forward P/E is 13.36 and the company does not pay a dividend. The stock’s 52-week trading range is $11.56 to $28.61. At today’s price it is about 77% above its 52-week low and 28% below the 52-week high. The company beat both quarterly EPS and revenue estimates when it reported earnings last week. But a warning on future enrollment and profit declines have cooled enthusiasm for the shares.

American Public Education has a median target price of $45.00 from 10 brokers. Shares are trading today at $35.11, for an implied gain of $9.89, or 28%. APEI’s forward P/E is 14.50 and the company does not pay a dividend. The stock’s 52-week trading range is $26.15 to $49.29, and at today’s price that is about 49% above its 52-week low and 26% below the 52-week high. The company reports earnings next week and is expected to post EPS of $0.42 on revenue of $62 million. The EPS figure is less than the June quarter, but better than the same period a year ago.

Strayhorn Education has a median target price of $104.00 from 12 brokers. Shares are trading today at $83.06, for an implied gain of $20.94, or 25%. Strayhorn’s forward P/E is 11.39 and the company pays a dividend yield of 4.6%. The stock’s 52-week trading range is $69.34 to $165.73 Today’s price is about 29% above its 52-week low and 50% below the 52-week high. The company reports earnings on Thursday and is expected to post EPS of $1.07 on $139 million in revenue. That is a big dip from the same quarter a year ago, when EPS came in at $1.72, and an even bigger dip sequentially, from $2.53 in the June quarter.

DeVry has a median target price of $52.50 from 16 brokers. Shares are trading today at $38.14, for an implied gain of $14.36, or 38%. DeVry’s forward P/E is 8.55 and the company pays a dividend yield of 0.6%. The stock’s 52-week trading range is $34.24 to $66.85, and at today’s price that is about 11% above its 52-week low and 43% below the 52-week high. The company missed both EPS and revenue projections last week when it reported its first fiscal-quarter 2012 results. Enrollment was also lower as bleak job prospects keep potential students away.

Washington Post has a median target price of $275.00 from just a single broker. Shares are trading today at $336.80, about 18% above the target price. The forward P/E is 19.44 and the company pays a dividend yield of 2.6%. The stock’s 52-week trading range is $308.50 to $455.68. Today’s price is about 9% above its 52-week low and 26% below the 52-week high. The Kaplan education division of the company contributes more than 50% of Washington Post’s revenues and nearly half of net income. The company is expected to post EPS of $3.85 on revenue of $1 billion this Friday. The lack of coverage makes this stock a tough one to figure out.

Corinthian Colleges has a median target price of $2.00 from 10 brokers. Shares are trading today at $2.04, fractionally above the target price. Corinthian’s forward P/E is 9.93 and the company does not pay a dividend. The stock’s 52-week trading range is $1.24 to $6.12, and at today’s price that is about 65% above its 52-week low and 67% below the 52-week high.

Bridgeport Education has a median target price of $26.00 from 10 brokers. Shares are trading today at $22.94, for an implied gain of $3.06, or 13%. Bridgeport’s forward P/E is 8.88 and the company does not pay a dividend. The stock’s 52-week trading range is $13.89 to $30.62, and at today’s price that is about 65% above its 52-week low and 25% below the 52-week high. The company posted better-than-expected third-quarter earnings this morning and raised full-year EPS guidance to $2.95 to $2.98. Enrollment is expected to fall by about 5,000-8,000 students by the end of December.

Grand Canyon Education has a median target price of $18.50 from 10 brokers. Shares are trading today at $15.97, for an implied gain of $2.53, or 16%. Grand Canyon’s forward P/E is 13.22 and the company does not pay a dividend. The stock’s 52-week trading range is $12.26 to $20.66, and at today’s price that is about 30% above its 52-week low and 35% below the 52-week high. The company reports third-quarter earnings next week and is expected to post EPS 0f $0.25 on $109 million in revenues.

Career Education has a median target price of $20 from 11 brokers. Shares are trading today at $15.79, for an implied gain of $4.21, or 27%. The forward P/E is 8.77 and the company does not pay a dividend. The stock’s 52-week trading range is $12.24 to $27.60, and at today’s price that is about 29% above its 52-week low and 43% below the 52-week high. The company reports third-quarter earnings next week, and the consensus EPS estimate is $0.34 on $457 million in revenue. The EPS estimate has been trimmed from $0.46 over the past three months. Shares gained nearly 5% on October 19th, following the strong earnings report from Apollo.

Paul Ausick

Filed under: General Tagged: APEI, APOL, BPI, CECO, COCO, DV, EDMC, LOPE, STRA, WPO

Short Seller Swarm: Highest Days To Cover (CADX, DMND, TSLA, OMEX, PACR, MNKD, WAVX, ENER, NTRI, ZIXI, MR, ZZ, RCI, MNI, HGG, AM, BPI, LTM)

Administrator — Tue, 27 Sep 2011 15:13:51 +0000

Many investors track the largest increase in short selling, but there is another crucial way to look at short interest: the days to cover often tells just how actively shorted a stock is, as does a large percentage of its float. More importantly, these often represent a longer-term bias by the trading community. We have tracked the NASDAQ and NYSE short interest data today to screen for companies with the highest days to cover ratios (all are over one months of trading volume). We also looked for a high percentage of its shares outstanding or its float to be in the short interest. Almost all of these also had an increase in the period from August 31 to September 15 settlement dates.

The NASDAQ stocks which fit this bill are as follows: Cadence Pharmaceuticals, Inc. (NASDAQ: CADX); Diamond Foods, Inc. (NASDAQ: DMND); Tesla Motors, Inc. (NASDAQ: TSLA); Odyssey Marine Exploration, Inc. (NASDAQ: OMEX); Pacer International, Inc. (NASDAQ: PACR); MannKind Corporation (NASDAQ: MNKD); Wave Systems Corporation (NASDAQ: WAVX); Energy Conversion Devices, Inc. (NASDAQ: ENER); NutriSystem Inc. (NASDAQ: NTRI); and Zix Corporation (NASDAQ: ZIXI).

The NYSE stocks which fit this bill, except for one, are as follows: Mindray Medical International (NYSE: MR); Sealy Corporation (NYSE: ZZ); Rogers Communication, Inc. (NYSE: RCI); The McClatchy Company (NYSE: MNI); HHGregg, Inc. (NYSE: HGG); American Greetings Corporation (NYSE: AM); Bridgepoint Education, Inc. (NYSE: BPI); and Life Time Fitness (NYSE: LTM).

We only looked at companies with an average volume of more than 250,000 shares and have added some loose color on these if applicable.

Filed under: Short Interest, Trading Alert Tagged: AM, BPI, CADX, DMND, ENER, HGG, LTM, MNI, MNKD, MR, NTRI, OMEX, PACR, RCI, TSLA, WAVX, ZIXI, ZZ

Bridgepoint Massive Share Offering, Overhang Versus Dilution (BPI)

Administrator — Mon, 25 Jul 2011 13:15:10 +0000

Bridgepoint Education, Inc. (NYSE: BPI) is getting absolutely pounded this morning. After the close on Friday came word that Bridgepoint filed a registration statement with the SEC to register for the resale of a whopping 34,589,220 shares of common stock. This was over $1 billion in stock at the time, while the market capitalization was only $1.6 billion.

What makes matters more harsh is that this is not for a large acquisition, nor to pay off debt. These shares are simply being made available for sale by Warburg Pincus Private Equity VIII, L.P. None of the shares are being sold by the company. This represents a massive overhang on the real public float.

Warburg Pincus and its approved entities will be free to offer these shares from time to time through public or private transactions “at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices.”

What is interesting is that the filing showed that this is not a dilution of shares of common stock currently outstanding. Technically that is true. What this does though is to greatly expand the free float that can be bought and sold in the public markets after Warburg Pincus locks in the sales.

Shares closed at $30.50 on Friday and the stock is indicated down a sharp 8.9% at $27.80 against a 52-week range of $12.75 to $30.62. The average volume is only about 650,000 shares and that recent high is also an all-time high since this came public in 2009.

JON C. OGG

Filed under: Private Equity, Secondary Offering Tagged: BPI

Key Stocks To Watch The Week Ahead, The Unusual Suspects (AMD, BKU, BAMM, BPI, CA, CLH, DWA, ERTS, ETFC, F, GLD, SLV, LNKD, Z, P, LULU, NWS, WFT)

Administrator — Sun, 24 Jul 2011 11:30:58 +0000

24/7 Wall St. usually looks for the companies with upcoming events in the week ahead. During earnings season, we generally feature companies only with non-earnings events. This is our list of “The Unusual Suspects” for the week ahead and we have outlined the events for the following companies: Advanced Micro Devices, Inc. (NYSE: AMD); BankUnited, Inc. (NYSE: BKU); Books-A-Million Inc. (NASDAQ: BAMM); Bridgepoint Education, Inc. (NYSE: BPI); CA Inc. (NASDAQ: CA); Clean Harbors, Inc. (NYSE: CLH); DreamWorks Animation SKG Inc. (NASDAQ: DWA); Electronic Arts Inc. (NASDAQ: ERTS); E*TRADE Financial Corporation (NASDAQ: ETFC); Ford Motor Co. (NYSE: F); SPDR Gold Shares (NYSE: GLD); iShares Silver Trust (NYSE: SLV); LinkedIn Corporation (NYSE: LNKD); Zillow, Inc. (NASDAQ: Z); Pandora Media, Inc. (NYSE: P); Lululemon Athletica Inc. (NASDAQ: LULU); News Corp. (NYSE: NWS); and Weatherford International Ltd. (NYSE: WFT).

Many events are ongoing and some are carryover events to consider, and we have added color on each if applicable. On a separate note, we did compile what is a detailed preview of the top earnings this coming week as well as the top ten analyst calls of this last week.

Advanced Micro Devices, Inc. (NYSE: AMD) was one of the top gainers on Friday after it reported positive earnings. The 19%+ gain to $7.75 puts it back in the middle of its 52-week trading range of $5.53 to $9.58. The 85+ million shares traded appears to be the biggest one-day share volume back to November of 2009. Forbes is calling for a run to $10 even with its CEO overhang issues.

BankUnited, Inc. (NYSE: BKU) has been public for just about six-months and its IPO lock-up period from insiders and 10% owners is set to end this week. At $25.61, its post-IPO range is $24.88 to $29.90.

Books-A-Million Inc. (NASDAQ: BAMM) may have thin trading volume and may only be worth $53 million in market capitalization, but we believe that this small cap offers a stealthy road to winning from the Borders bankruptcy liquidation. We featured this as the stealth winner, and for some reason the shares were up 10% on Friday ahead of a Bizjournals.com report that the company submitted bids for 30 of the Borders locations.

Bridgepoint Education, Inc. (NYSE: BPI) took it on the chin after the close on Friday with a drop of about 6%. The company filed with the SEC to register the resale of 34,589,220 shares of common stock held by Warburg Pincus Private Equity VIII, L.P. The company has about $1.6 billion in market cap, but at the $30.50 price that comes to a combined share sale of $1.037 billion before the effects of the sell-off. Can you say dilution to the free float?

CA Inc. (NASDAQ: CA) is slated to have an investor meeting this coming Friday. With shares trading around $22.60, let’s just go even deeper on record noting that this one has been dead money for about 7 years or so whether it has a $11.5 billion market cap or not.

Clean Harbors, Inc. (NYSE: CLH) is set to trade ex-split on July 27 to reflect its 2-for-1 split. The stock trades north of $112 and shares hit a high of $114.09 on this last Thursday. This stock is up about 50-fold in the last ten years and it looks like it is the first split for the $3 billion environmental remediation outfit.

DreamWorks Animation SKG Inc. (NASDAQ: DWA) is in discussions over a streaming movie video rights deal with Netflix. The move could open up its distribution even more and at $21.05 it is at the bottom of a 52-week range of $19.76 to $37.74.

Filed under: Calendar, The Week Tagged: AMD, BAMM, BKU, BPI, CA, CLH, DWA, ERTS, ETFC, F, GLD, LNKD, LULU, NWS, P, SLV, WFT, Z

Top Analyst Upgrades & Downgrades (BHP, BPI, CAG, COP, ETFC, FDX, MRVL, RTP, SONC, SBUX)

247wallst — Tue, 23 Jun 2009 11:25:14 +0000

These are the top ten early bird analyst upgrades and downgrades from Wall Street early this Tuesday morning with more than two hours until the market opens.

BHP Billiton (BHP) Raised to Buy at Citigroup.
Bridgepoint Education (BPI) Cut to Neutral at Credit Suisse.
ConAgra (CAG) Raised to Buy at UBS.
ConocoPhillips (COP) Raised to Outperform at Bernstein.
E*TRADE (ETFC) Raised to Outperform at FBR.
FedEx (FDX) Raised to Overweight at JPMorgan.
Marvell Technology (MRVL) Cut to Hold at Deutsche Bank.
Rio Tinto (RTP) Raised to Buy at ING.
Sonic (SONC) Raised to Outperform at Oppenheimer.
Starbucks (SBUX) Raised to Outperform at Baird.

Jon C. Ogg
June 23, 2009

Posted in Analyst Calls Tagged: BHP, BPI, CAG, COP, ETFC, FDX, MRVL, RTP, SBUX, SONC

Russell Rebalance Including & Excluding Key IPO’s (BPI, DGI, OPEN, RST, RHIE, SWI, CYOU, LOPE, MJN, RAX)

247wallst — Fri, 19 Jun 2009 13:35:06 +0000

We will have some changes or further additions and deletions coming today from Russell for the highly awaited Russell rebalance and reconstitution taking place late this month. What is interesting about the group’s additions and deletions is that there are many of the hot (and not so hot) companies which came public via an IPO that are in the Russell index changes.

Bridgepoint Education Inc. (NYSE: BPI) is being added to Russell 3000 and to the Russell Global. DigitalGlobal Inc. (NYSE: DGI) is actually trading as a busted IPO and it is being added to Russell 3000 and to the Russell Global. OpenTable (NASDAQ: OPEN) is being added to Russell 3000 and to the Russell Global. Rosetta Stone Inc. (NYSE: RST) is being added to Russell 3000 and to the Russell Global. RHI Entertainment (NASDAQ: RHIE) was a distant IPO but it is being added to Russell 3000 and to the Russell Global. SolarWinds Inc. (NYSE: SWI) is a very fresh IPO and is being added to Russell 3000 and to the Russell Global. There is also a list of other key IPOs which were not included for certain issues.

Changyou.com Limited (NASDAQ: CYOU) was not listed in the first preliminary list for the Russell 3000 but that could be from an ADR status, the percentage of the free float to total shares, and the recent spin-off. Grand Canyon Education (NASDAQ: LOPE) was not listed on the preliminary list, and that may be a free float issue versus total shares. Mead Johnson Nutrition Co. (NYSE: MJN) was also not on the Russell 3000 preliminary list, but that may be an issue over the total float and spin-off. RackSpace Hosting Inc. (NYSE: RAX) was not on the initial list.

As noted with the speculative energy stocks getting booted off the list, there will be changes and adjustments announced today and next Friday before the final-final lists are posted on Monday June 29, 2009.

Jon C. Ogg
June 19, 2009

Posted in Index, IPOs Tagged: BPI, CYOU, DGI, LOPE, MJN, OPEN, RAX, RHIE, RST, SWI

2009 IPO Scorecard, Up 27% On Average (CYOU, RST, MJN, DGI, BPI)

247wallst — Mon, 18 May 2009 18:54:43 +0000

We have been keeping track of the 2009 IPOs that made it to market, and while one is barely broken, a portfolio of the IPOs from the pricing level gives a solid performance that might allow more and more IPOs to come to market. For the 2009 IPOs we have only Changyou.com Limited (NASDAQ: CYOU), Rosetta Stone Inc. (NYSE: RST), Mead Johnson Nutrition Co. (NYSE: MJN), DigitalGlobal Inc. (NYSE: DGI), and Bridgepoint Education Inc. (NYSE: BPI).

Here is how each has done on a per-IPO basis, with the strongest performers first.

Changyou.com Limited (NASDAQ: CYOU) priced at $16.00 and hit $29.00 today.
Rosetta Stone Inc. (NYSE: RST) priced at $18.00 and hit $23.80 today.
Mead Johnson Nutrition Co. (NYSE: MJN) priced at $24.00 and hit $28.80 today.
DigitalGlobal Inc. (NYSE: DGI) just last week priced at $19.00 and hit $19.75 today.
Bridgepoint Education Inc. (NYSE: BPI) is only busted IPO that priced at $10.50 and is trading at $10.29 today.

We tallied up a $10,000 investment in each of these at the pricing to derive what a portfolio would look like from the pricing. This is only 5 stocks, but this is all we have to work with from 2009 IPOs. So a $50,000 investment in all of the 2009 IPO’s would be worth $63,541.00 today (pennies rounded down). That is a gain of 27% on average.

Obviously, it is not fair to say that this portfolio would have netted out secondary market investors the same as many trad up from the IPO pricing. But this is what drives IPO investors in their decision making, and this may be what gets the investment bankers and private companies off the fence to start issuing more and more IPO’s if the market remains strong or stable.

JON C. OGG
May 18, 2009

Posted in IPOs, Trading Alert Tagged: BPI, CYOU, DGI, MJN, RST