Apollo Group Inc (APOL): Today's Featured Diversified Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Apollo Group ( APOL) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day up 0.3%. By the end of trading, Apollo Group fell 56 cents (-2.6%) to $20.94 on heavy volume. Throughout the day, 4.3 million shares of Apollo Group exchanged hands as compared to its average daily volume of 2.8 million shares. The stock ranged in price between $20.44-$21.62 after having opened the day at $21.35 as compared to the previous trading day's close of $21.50. Other companies within the Diversified Services industry that declined today were: Education Management Corporation ( EDMC), down 9.8%, China Yida ( CNYD), down 9.8%, Lincoln Educational Services Corporation ( LINC), down 6%, and Swisher Hygiene ( SWSH), down 5.9%.
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Apollo Group, Inc., through its subsidiaries, provides online and on-campus educational programs and services at the undergraduate, master's, and doctoral levels. Apollo Group has a market cap of $2.47 billion and is part of the services sector. The company has a P/E ratio of 6.8, below the S&P 500 P/E ratio of 17.7. Shares are up 5.3% year to date as of the close of trading on Monday. Currently there are six analysts that rate Apollo Group a buy, one analyst rates it a sell, and eight rate it a hold.

TheStreet Ratings rates Apollo Group as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).

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