What to Do When Insiders Exit

That's great growth when growth is at a premium in this slowing U.S. economy. The price for this growth appears to be the problem, however -- and understandably so. Even after falling 36% from its highs, VOCS still trades for 38 times the high end of 2008 expectations. That's a full-price multiple as far as I'm concerned, with no room for any hiccup in performance or investor sentiment.

The Book on APEI

Shares of American Public Education are likewise pricey. This online post-secondary education firm catering to military personnel may have fabulous profit margins, but its shares also carry a multiple of nearly 50 times the trailing EPS the company just announced. This would seem to leave little room for disappointment in this still-unseasoned company, which only came public last November.

That multiple is as high as it is even after APEI has fallen 29% from its recent highs.

Interestingly, three large investors in APEI -- and three more executives -- thought it an excellent time to sell a significant amount of their shares on Feb. 19 via a secondary offering. Alas, the firm itself only benefited from selling 25,000 of the total of more than 3.7 million shares sold. This was clearly an exercise in getting past investors out as quickly and cleanly as possible with their profits.

Considering APEI's valuation, I can't blame these institutional and executive holders for their actions.

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