The latter appears to be the case with Career Education ( CECO), which is in the for-profit education business. This is a sector that has suffered mightily over the past few years, due to reports of questionable business practices, including misleading students into assuming large amounts of debt that they might not be able to pay back. Since many of these loans were government-backed, tighter regulations have followed. In turn, many names in the sector have fallen sharply in recent years, as enrollments and profits have dwindled, and an industry that once had cult-like status, is now viewed with skepticism. CECO shares have dropped 50% in the past year, as the company's total student population fell 21% for the first quarter vs. the same quarter last year.
If, somehow, the company was able to stem the bleeding, and exceed the rather negative expectations, this would be an interesting situation. CECO currently trades at just 0.5 times tangible book value per share, and expectations appear to be very low. It's also the only negative EV nonbiotech company (at this writing) with a market cap in excess of $100 million. CECO data by YCharts
At the time of publication, Heller had no positions in stocks mentioned. Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.