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Corinthian Colleges Inc. Message Board

  • longtimefollower longtimefollower May 6, 2014 4:17 PM Flag

    Buying aggressively. Now own 3% of company.

    Average cost of $1.58. (I was 10% of today's total volume.)

    My Expectations:

    1) Cost cutting will stay ahead of revenue declines. Company remains cash flow and GAAP EPS positive.
    2) Company finds lender to replace ASFG by June 30th. Lender buys all in house funded loans as well.
    3) Company gets waiver from bank on technical default in the next week, before 10-Q is filed.
    4) Company remains in compliance with ED, with NO requirement of posting letter of credit.
    5) New initiatives turn around enrollments by the end of this calendar year.
    5) Company maintains liquidity. Stock trades higher when investors see this is NOT a "pending Ch. 11."

    KICKER: Sale or spin off of Heald could yield multi-bagger stock price increase (and MASSIVE short covering rally) similar to what happened with CECO, when it sold off its international ops.

    Sentiment: Strong Buy

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    • I tend to agree with your strong buy. BTW, caught this from spam at another board. If we get a drop below 30c I'll pick up a few shares. I see the 30 times average volume meaning capitulation and plenty of new shareholders willing to take on the risk down here. Good luck to you and new longs.

    • Zzzzzzzzzzzzz. Isn't there a dating company called Great Expectations? Nostradamus you are not....lol. YOu wishful thinking was laughable. You brought in some suckers and destroyed them (and yourself), just like you destroyed everyone with your lousy HTCH wishful thinking (riding from over $6 to $2 now, and it happened fast).

      You gotta know WHAT THE SITUATION IS, sucka! This is not 2009. There are no more bailouts for bad investors. Get with the program. It must have been one heck of a jolt this morning when you saw your account down 3 million. Did it bust you? Time to get a real job. Your research is terrible. What a fall from grace. Wow.

    • Wow. You've made some good picks but shorting LEE and buying COCO are not among them.

    • I still feel that COCO will make an incredible comeback in the near future, and/or someone will propose to them or part. Are you still flying high with positive anticipation Longtime?

    • What the heck are you smoking? an 86 million dollar company that the CEO gets paid over 3 million a year? It is as if Tim Cook gets paid 15 Billion a year. The management could not care less, and they have not in years. The board of trustees is asleep.

    • My thoughts:

      Not that I was excited by what came out this morning, but it didn't seem as bad as you suggest. For instance, new students were down 13% and next quarter they are suggesting 16-18% - but over half of that is due to decreases in marketing and admissions ie. the company is coming out ahead net of marginal revenue and cost. Also, APOL was down 16% in the last quarter on new students; so COCO is actually better than the industry leader, and that is despite choosing to reduce enrollment to "better align costs with trends in the industry" as Jack says.
      Second, long term debt is now down 30% Y-Y to 100 million. To put the current market cap in perspective to operating cash flow, they have made 50 mm this year in the first 9 months (it would have been 68 mm save Genesis, but they expect to recoup that in the 4 Q) compared to a market cap of 94 mm or so. As Trace said, this is absurdly cheap. I'd like your thoughts. APOL by way of comparison expects cash flow from operations in the 400 million range on a market cap of over 3 billion. The company can be bought today for almost 1 year of cash flows; their debt level appears manageable, even in a rough year - how exactly is their balance sheet unsustainable or their valuation ratios off?
      Third, the company raised guidance by more than double in Q4 to 11-13 cents from a street estimate of 5 cents. Unless the business closes, that is a projected earnings yield of 44% compared to the broader market at about 5%. It seems to me that the company is focusing on the bottom line to as Jack said, "weather the current macro storm." And a few other things, the Q4 guidance the company provided is the highest in 2 years, and if achieved, would be the highest actuals in 3 years (and that is on a seasonally weak period). Also, they are guiding revenue to be down about 1% of Q3 actuals, whereas in the prior year Q3-Q4 period revenues were off 5%.

    • Longtime: My responses follow yours:

      1) Cost cutting will stay ahead of revenue declines. Company remains cash flow and GAAP EPS positive.
      OK. So more people are cut to create less students leading to more people cut to create even less students. That's no answer except to the question how do we go to zero.
      2) Company finds lender to replace ASFG by June 30th. Lender buys all in house funded loans as well.
      OK, so we put a band aid on that only to find another 30 million holes in the sinking ship.
      3) Company gets waiver from bank on technical default in the next week, before 10-Q is filed.
      Another band aid to buy time at best.
      4) Company remains in compliance with ED, with NO requirement of posting letter of credit.
      Marginal compliance at best. The next bad news of a lawsuit or bond requirement sends us right back to the same place. 18+ lawsuits and counting and multiple Fed Agency investigations. Either by cost of fighting or any successful litigation resulting in a payout, the company has no reserves and no margin.
      5) New initiatives turn around enrollments by the end of this calendar year.
      That's your own Kool Aid. Even management, who is desperate to find every potential future bright spot, is not saying this. They are saying they are putting in initiatives and nothing more. Yea, and they have been doing this for years with the same horrible results. Hard to believe they are still playing the same poker cards.
      5) Company maintains liquidity. Stock trades higher when investors see this is NOT a "pending Ch. 11."
      $28M in cash. Ok, as long as either enrollment does not decline 5% faster than cost cuts, or one of the 28 lawsuits is not successful with a multi-million dollar award, or Federal funding is not cut, or bank financing is not changed, sure, the liquidity might not be challenged.
      In summary, if we get the best of the best of the best and avoid about 100+ negative pending outcomes, sure...you may be right. Don't count on it!

 
COCO
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