DeVry Goes From Value to Value Trap (DV)
DeVry Inc. (NYSE: DV) is in a position which just feels like a no-win situation in for-profit education. Shares are down nearly 8% at $36.50 and we have already passed a full day’s trading volume with over 1 million shares…
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DeVry Inc. (NYSE: DV) is in a position which just feels like a no-win situation in for-profit education. Shares are down nearly 8% at $36.50 and we have already passed a full day’s trading volume with over 1 million shares traded in the first 90 minutes of the trading session.
The company had a large write-down in its fourth quarter in the report delivered on Thursday evening. The impairment charge was nearly $56 million at the Carrington Colleges Group unit. Earnings came in at a mere $0.13 EPS and Thomson Reuters was calling for about $1.00 in its reported per share earnings.
The drop to $36.50 compares to a 52-week trading range of $32.73 to $66.85. The trailing P/E ratio of 8 now may look enticing as a value stock on the surface, but when you see earnings compression like this it is a classic case where a value stock turns into a value trap. The pressure on the for-profit education sector is just not yet coming out from being under fire.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
