Back from a vacation and I see that the Gainful Employment stuff was very good regarding ESI. So much for all the bears raising a stink about ESI's gainful employment status.
Now I see that the Federal Courts just totally blew the Dept. of Educations 35% student loan default rule out of the water.
APOL also had earnings that were better than expected.
Seems like the short sellers are not getting it done as it pertains to ESI fundamentals. ESI share price may be off the 2012 high, but the fundamentals are so much better than what the shorts have been projecting.
I wonder what is next. I think that ESI shares should be trading much higher than $62, but the lack of float and the volatility in the shares has to chase a number of potential buyers away. ESI earnings are going to be released near month end - and i suppose that will be the next big thing.
Who was giving away their shares just the other week below $55? I made another pile of money trading ESI on the long side in the past two weeks. I took a pile of additional shares on the long side as a swing trade, as opposed to a day trade. I still have those extra shares, in addition to my core position.
BTW, why would "a lack of float" deter buyers. Aren't you the one pounding the table that a lack of float is good for longs and bad for shorts? And I don't know what measure you're using, but what increased volatility are you seeing? The ATR has been lower compared to previous levels. You seem to post things without any data to back it up...
1) While APOL reported "good" earnings for the 3rd quarter (if a YOY EPS decline of 25% and revenue decline of 9% due to lower enrollment can viewed as good) they didn't raise the upper end of their full year estimates meaning the 4th quarter will likely be weaker than expected as new starts will continue to decline into 2013.
2) I'm not sure there is a lot read through from APOL to ESI. Outside of the obvious differences, APOL has implemented a number of changes to their admissions process to improve outcomes, ESI hasn't.
3) The ruling by the federal judge that the 35% repayment rate was "arbitrary and capricious" only adds more uncertainty. The judge didn't say in what direction it was flawed, so it could be be revised higher or lower based on industry standards and/or expert studies. I'm guessing a number of investors used the initial pop at the open as a selling opportunity.
I'm still long, but if the price action doesn't have some follow through to the upside I'll likely lighten or close out my position.