This Day On The Street
Continue to site
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

For-Profit Education Stocks: Are They Investment Grade?

NEW YORK ( TheStreet) -- Every great teacher understands that a student, despite his or her personal obstacles, will rise to the level of expectations. But recently, for-profit education companies such as Apollo Group (APOL - Get Report) and Strayer (STRA - Get Report) have suffered due to high demands and stricter government regulation.

Source: YCharts

The entire industry, which has been under much scrutiny regarding poor student loan repayment rates, is getting remedial lessons in business economics. But as a consequence, not only have their collective student enrollments declined in the past two years, but so have their stock prices. And investors who bought into these companies are being lectured on the laws of supply and demand. But will they make the grade?

The chart above paints a very clear picture. It suggests struggles in the industry spanning the past couple of years. However, although the chart shows how this industry has traded in tandem, these companies are not all made the same. One such standout is DeVry (DV - Get Report), which is up nearly 30% so far in 2013.

DeVry, which can be considered one of the "seniors" in this industry, has consistently done its part to supply our economy with capable workers. Not to mention DeVry has one of the best and easy-to-understand businesses in this entire category. For this, the company doesn't get enough "credit."

Plus, from the standpoint of DeVry's program offerings, it matters very little in which industry a student might be interested. Whether it's health care, IT or journalism -- there's a program that will meets the needs of any student. Don't mistake DeVry's well-diversified offerings for a lack of focus.

What's more, with one of the best job placement rates in the industry along with a pristine balance sheet, it's hard to ignore the advantages that this company has over its rivals. And unlike Apollo's University of Phoenix program, which is the leader in enrollments by a meaningful margin, DeVry has been able to grow consistently without cutting corners.

Despite DeVry's strong fundamentals, which includes zero debt, while also being one of the best in the sector in year-over-year revenue performance, there is persistent negativity among those who cover the sector and insist on painting all of the companies with the same brush.
1 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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
COCO $0.01 1.49%
APOL $7.09 -0.98%
DV $23.70 1.76%
STRA $59.36 3.16%
AAPL $118.03 -0.71%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs