Linc is taking much longer to to turnaround then I thought. Unlike ESI, BPI, DV, and UTI, Linc's SP has languised at this SP level for over a year. To make matters worst, school closings, decreases in enrollments, and losing ATB is still an ongoing concerns. Revenue dropped double digits QoQ and YoY. Cash on hand is less than $5mil, down from over $60 mil just the end of last year, and they need to sell more shares to fund their operation. That being said, I believe the .07 cents dividend will be cut to preserve cash or they have to borrow to fund dividend. If this happens, the SP will crater. What's also scary is Inst. holders hold over 40% of the OS. If they decide to sell because of the dividend cut, then we may see this stock in $2 range easily over the next 6 months. In the next 2 quarters, Linc will meet a lot of headwinds, and I see the negative trend to continue without a recover in sight. Despite the decrease in enrollment, tuition rose across the board. It will be a tough sell until Linc can stabilize the enrollment situation. One thing I believe will happen is consolidation. I am not sure of the geographical overlapping of UTI campuses and facilities, but there might be an M&A activity if the stock price drops.
I think it was a brave move of Lincoln to take the road less traveled. They are going to let the other schools duke it out for online students and government grants while they concentrate on hand's on training in skilled trade's such as automotive. They are also gearing their future towards less dependence on government grants by offering more certificate training and teaming up with real companies that have real labor needs. It is a bold strategy but at the same time will set Lincoln apart from the other for-profit diploma mills. Definately not an investment for the week of heart and I don't disagree that this stock could see the $2.00 range sometime this year but I applaud management for making the tough decisions to take the road less traveled.
Ball, I am OK with the thumbs down, but I agree that Linc is taking a different path forward. If the institution are confidence and are adding more, then they might know something that I don't. If the trend is an increase for automotive enrollment come next quarter like it has last quarter, then Linc has a future. Should you buy now or wait until it dromps in the $2 and buy. Linc might announce something significant then to avert such a drop IMO. If it does drop to $2, will you be a buyer?