This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will Bridgepoint Be Held Back a Year?

Revenue and earnings are bright spots for Bridgepoint. Bridgepoint is on the honor roll with revenue quickly nearing $1 billion dollars annually, an improvement of 9.2% over last year. Based on revenue and an apocalyptic future price-to-earnings ratio of 5, it appears the selloff is beyond reasonable and likely short-lived. The industry-wide earnings ratio is estimated at near 20, with Apollo, DeVry and Corinthian near 10.

Corinthian missed by a penny on May 3 when it reported quarterly earnings of 15 cents a share. Apollo reported $1.20 in earnings on June 25, beating estimates by 23 cents. Bridgepoint's next earnings release is scheduled for August 7. Two days later, DeVry reports, and we should have a very good idea of what to expect. As a result, expect increased volatility for DeVry through earnings.

Insiders hold an abundance of shares and didn't sell enough in the previous six months to develop a clear bias. I like to see management and investors interests aligned. With Bridgepoint, I can say that's the case.

Buy News-Driven Sell-Offs

Based on my experience with gap-downs following news-driven events similar to those at Bridgepoint, investors will see short-term lows Tuesday or Wednesday. Monday's low testing $14 with a strong bounce higher suggests it won't take much time for the market to figure out its first knee-jerk reaction may be overdone.

Want to see a classic news-driven crash based on a possible problem result after the fact? Take a look at Visa (V - Get Report), which fell further and further on December 16, 2010.

I recall that trading day, and my opinion about Visa was the same as my current opinion of Bridgeport: Shares are oversold and will recover. Visa dropped as a result of Federal caps on debit card fees. The selloff proved to be a very good entry for a short-lived bargain.

Visa traded at a low the day after the large price drop and hasn't traded as low since. A year and a half later, Visa trades at about double the price. This is a classic pattern I see often, and you can, too. Simply use your software to look at charts from the past few quarters and review the ones that gapped down the next day. Ask if the reason for the drop is a material impact or something the company can do something about.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
COCO $0.01 1.49%
APOL $11.11 0.00%
BPI $8.08 0.00%
DV $26.16 0.00%
V $71.30 0.00%

Markets

Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs