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ITT Educational Services Inc. Message Board

  • thedeathrace thedeathrace Mar 7, 2013 4:52 PM Flag

    Since when does Seeking Alpha post something positive on the education stocks like this...

    The for-profit post-secondary (collegiate) education industry is one of the most out of favor areas on Wall Street. With an average price divided by earnings (P/E) multiples of about five times, the street's view is obviously quite pessimistic. This is primarily due to substantial declines in student enrollments according to Securities and Exchange Commission filings, which in turn decimates revenues across the board for the industry. In addition, worries over high student loan balances have increased, discouraging attendance of the already costly collegiate programs. Matched with a lackluster employment market, college to some seems to have lost much appeal. It is argued that the for-profit post-secondary education industry will continue to underperform the market over time due to continued declines in enrollments and plummeting earnings; however, as the United States (U.S.) jobs market makes a steady recovery, the demand for enrollment should start increasing, causing the education industry to outperform the broader market. Stocks in the for-profit post-secondary education industry make great potential turnaround investments because they have sound business models, challenging but improving fundamentals, and an overly pessimistic view by Wall Street.

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    • God help you if you are reading SA for investment advice. That being said, the article you are referencing was the first article by that particular "contributor". You or I could sign up to be a "contributor" tomorrow and get an article published. Dont fool yourself, that site is completely worthless.

    • I guess you have not heard of the Student loan bubble and the enormous defaults ocurring. These sound business models worked fine when the government was lending money in this industry, but now have tightened the reigns and are scrutinizing every move the For-Profit Education companies make. The investment a student makes far outweighs the return. These For-Profit companies have out priced themselves and will have to re-think these strategies before we will see any recovery. The cash you say ITT has will be exhausted when they have to cover the PEAKS Private Student Loan Program. The P/E will fall regretably and therefore the stock price will continue to fall. I am looking for a good entry point, but single digits will be my point. Yes, maybe in 5 years things may turn around, but no way in short term will this stock move upward.

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