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Career Education Corp. Message Board

  • watchthedownside watchthedownside Nov 8, 2012 5:54 PM Flag

    Awful report....revenue down 22%+ compared to last year

    Worst of group as I have been warning.......

    and revenue now at a run rate of 63% of peak (versus 90% for COCO)

    limited cash losses are great, but we will see how fast and how long management can cut costs as secular decline for CECO revenue continues

    GOOD LUCK!!!

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    • Lousy industry - I agree
      Bad company - I agree
      But - plenty of cash and turnaround in process and
      the most important parameter - ridiculous share price!

      That's the way to make money

      Sentiment: Strong Buy

      • 1 Reply to shushlife
      • I understand where you are coming from and as I have said in the past, I truly think this sector is beat up well beyond where it needs to be. However, the best way I have made money over the past 24 years is to study an industry first, and then drill down to individual participants. Not to sound like a broken record, but CECO may be in secular decline and COCO and ESI are dirt cheap and are probably not in secular decline, and APOL is very close to dirt cheap and is likely also not in secular decline. Further, CECO has a very high fixed cost based of approx. $438mm in its Cost of Services account (this is far higher than the others). In other words, it cannot cut below that level not matter how far revenue drops. I continue to recommend (as I have since $7 to $8 per share) avoiding CECO and focusing on the rest of the sector.

        Best of luck all, and be sure to really study an industry and a company and not guess based simply on statistics.

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