Some News , Gonna pick up 1500 shares any minute now, I'm gonna catch this falling knife------------
For-profit education stocks sink after Senate Democrats propose crackdown
Shares of for-profit education companies are sinking after Senate Democrats proposed a bill that would strengthen the Department of Education's oversight of these companies. The legislation would require the department to conduct reviews of colleges that are spending more than 20% of their revenue on recruiting and marketing and obtain more than 85% of their revenue from federal student aid programs, according to a summary of the bill posted on the website of Democratic Senator Frank Lautenberg. The reviews would assess several areas, including the schools' use of incentive compensation, graduation rates, and misuse of federal funds, the summary added. In a note to investors earlier today, BMO Capital wrote that it believes the bill is unlikely to become law, and that the sell-off in the sector is "a bit severe." However, the firm added that it does understand why investors are concerned about the legislation. In mid-afternoon trading, Apollo Group (APOL) fell 3.4% to $16.08, Career Education (CECO) slid 9.3% to $2.72, Strayer (STRA) dropped 4% to $46.86, ITT Educational (ESI) tumbled 7% to $12.60 and DeVry (DV) declined 1.2% to $29.63.
This is the reason for the stocks to go down today? Is this all that has come of the Senate witch hunt? This looks like nothing. We have the 90/10 rule currently. So now IF an education company spends 20% on recruiting and marketing AND 85% is from federal student aid programs, then the DOE would "assess" several areas, including the schools' use of incentive compensation, graduation rates, and misuse of federal funds. These schools are already so regulated and examined by so many regulatory authorities, I just don't see the big deal here. Recruiters already are not allowed incentive compensation. Misuse of federal funds goes nowhere as this area is already regulated and examined to death, and graduation rates are already required to be posted to students as I understand it (although I am not an expert on this specific subject). So what is new????
And then this legislation may NOT even become law! Who cares if it becomes law or not. It is a non-event.
Got 1100 more at 12.47, actually have been very lucky with my trades on ESI,but what I have sold and made $$ with, I bought AAPL,and PAY and got smacked that way,I finally sold NFLX at a hefty profit,did not want to take the chance of a pre announcement next quarter like PAY,Goog is now a double,but it took a couple of years. Good Luck