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Apollo Education Group, Inc. Message Board

  • oxledge oxledge Oct 5, 2009 5:46 PM Flag

    Not a single comment re EDMC ipo

    It is amazing all the yoyos on the board who act like they know everything about the education space, APOL, and ESI. Funny thing is that they are almost all technical traders who know nothing.

    Yet, not one comment from these asswipes about the most recent event in the education space. That is the ipo of EDMC. EDMC has a mkt cap of $3 billion, which is about where ESI's market cap is and 1/3rd of APOL's.

    But how does EMDC compare otherwise? Let's start with ESI, and then move to APOL. EDMC reported in the 6/2009 fiscal year profits ($100 milion) that were ONE HALF of what ESI reported in the calendar year 12/2008 (that is ESI's revenues over 1.5 years ago!). At the current run rate, ESI's profits are nearly THREE times larger than those of EDMC.

    What else?

    EDMC has massive intangible assets from its leveraged buyout that appear in the form of goodwill to the tune of $400 million. EDMC also has debt, net of cash, to the tune of a mere $1.4 million.

    Where does ESI Stand in this regard. Hmmm....No net debt. Zero. None. Intangibles? None. Zilch.

    And quess what? APOL is basically the same as ESI when compared to EDMC. APOL has 8 times the level of profits versus a market cap only three times larger. APOL has a staggering $80 million in goodwill against net cash on its balance sheet of $1.4 billion and no debt.

    So EDMC prices its ipo at $18 and the shares cruise to $23, a +20% gain in no time with Goldman Sachs as lead underwriter.

    Meanwhile, the two leading education companies trade at a p/e's of 10-12 and EDMC trades at a p/e of 20.

    I find it amusing that the moronic short sellers just dont get it. As usual, they fail to conduct even the most rudimentary fundamental analysis of the market landscape. It is all just another reason why they have consistently lost piles of money trading APOL and ESI.

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