10 Reasons To Avoid This Stock (not that you need 10)
In light of all of the headwinds in this industry from; compliance, regulation, investigations, accreditation reviews, competition (traditional schools now going online), decreasing enrollment numbers, lowering of admissions standards (which were not high previously), bad press, increased Department of Education scrutiny, and almost no upward guidance.... why would anyone even dip their toes in the for-profit education market? There are ZERO players in the market who've not lost at least 50% of their stock-share price over over the past 18-months.... run, don't walk to the door if you're still holding out hope. Try and salvage something, the rats have already abandon ship...what are you still doing on board?
that's not an accurate picture.....I've covered this before so I won't repeat myself but much of that cash is restricted. If they have so much cash, why did they borrow the maximum amount available on their Credit Agreement in December 2012 ($80 million). It's because much of the cash is restricted. Also, when people say "no debt" they are missing the $600 MILLION of contractual commitments due for their operating leases. It's not officially considered debt (although the accounting board is looking to change that), but it's a real commitment that is only discharged in Chapter 11. I'm not taking a position on the stock price; I merely want to help folks understand that I don't believe this is selling for roughly 50% of it's "cash value". Lots of very smart financial types would be flocking to this if it was....and they aren't.