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Career Education Corp. Message Board

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  • golfer18us golfer18us Nov 20, 2012 2:06 PM Flag

    Good buy in the $2s

    It's unfortunate that we can't have civil debate. Personally, I think this is a value trap. I recognize the apparent value of the cash but they are burning cash and they continue to face enrollment challenges. Unfortunately, their cost structure is highly fixed with occupancy expenses being the 2nd largest line item. You can see this in the 10K footnotes on contractual obligations. Their operating lease expense obligation is $700 million and that doesn't go away simply because they close a school. I suspect it will trade in the $2-4 range but if the next quarter doesn't bring improved news on enrollments/accreditation, that would be problematic.

 
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