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Career Education Corp. Message Board

  • truth2252 truth2252 Apr 11, 2013 3:52 PM Flag

    the group is strong with CECO lagging7

    The sellers continue to unload,including Blum. I own 10,000 shares with an avg price of 2.27. The shares appear to be dramatically oversold but until we get some clean up trades the money is dead. Willing to avg in a few more shares but will wait until the volume pushes me in. Everday the PM's are leaking shares into the market without a serious buyer to take them out...death by a thousand cuts.

    Sentiment: Buy

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    • CECO needs to do a stock buyback. In 2012, 6.1 million shares bought at avg.of $9.29. Imagine today at $2.15, $56 mill would buy back 25.5 mill of common stock. CECO will climb in a hurry.

      "Year to date through September 30, 2012, the Company repurchased 6.1 million shares of its common stock for approximately $56.4 million at an average price of $9.29 per share.

      As of September 30, 2012, approximately $183.3 million was available under the Company’s authorized stock repurchase program to repurchase outstanding shares of its common stock. "

      • 3 Replies to longceco
      • When analyzed, share buybacks rarely increase shareholder value. Why should they? Value is derived from the company's free cash flow. The only thing a buyback does is modify the balance does nothing to improve the company's revenue trajectory or reduce it's operating costs. Some folks will say "it's a signal"....again, the academic research would indicate it's not been a great one. Frankly, one signal it would send is that they have no better use for the organic growth acquisition prospects. That's no a good signal. This stock may rebound but it won't be driven by balance sheet will be driven by getting more enrollments and keeping those enrollments longer.

      • I'm long CECO, and it's a sizable piece of my portfolio. I wish they would do a buyback. Would be an awesome signal. But they also have cash needs. They will be operating at a loss for the next 18 months. In addition, they'll be teaching out a few of their physical locations - which means they need to keep the operations running even when they know enrollment is on its way to zero. It's the cost of the teach out, which they've already written off but still will use up cash. I hope that management believes that the shares are undervalued, but even if true I'm not sure if they will be in a position to buyback.

        Sentiment: Buy

      • agreed. They are in a cash hoarding mode. May be with the new CEO on board and some confidence in the balance sheet will lead to that.

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