20+% Growth Rate For Students Over 25 Participating in Post Secondary Education Until 2015-2020 Timeframe: Target Market For Education Stocks

• On 11:01 am EDT, Tuesday September 8, 2009

67 WALL STREET, New York - September 8, 2009 - The Wall Street Transcript has just published its Education Report offering a timely review of the sector to serious investors and industry executives. This 57 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Management Teams -- Secular Trends -- Regulatory Concerns -- Focus on Quality -- Developing Postsecondary Education Programs -- Growth in Postsecondary Education -- Online Education -- International Students -- Student Funding -- Execution Risk -- Management Transition -- Acceleration of Enrollment Rates -- Return on Invested Capital -- Long Term Prospects -- Regulatory Uncertainty -- Valuation Levels -- Stafford Loans -- Earnings Growth -- Opporunity for Growth -- For-Profit Institutions -- Nontraditional Students -- Postsecondary Tuition -- Domestic Players -- Jobs Market -- Decline in Stock Prices -- Fundamental Trends -- Valuation Levels -- Postsecondary Education in China -- Global Education -- Growth Prospects

Companies include: SkillSoft plc (SKIL); Rosetta Stone Inc. (RST); American Public Education Inc. (APEI); Apollo Group Inc. (APOL); Bridgepoint Education Inc. (BPI); Career Education Corp. (CECO); Capella Education Co. (CPLA); DeVry Inc. (DV); ITT Education Services Inc. (ESI); Grand Canyon Education Inc. (LOPE); Strayer Education Inc. (STRA); Blackboard Inc. (BBBB) and Universal Technical Institute Inc. (UTI); Corinthian Colleges (COCO); Lincoln Educational Services (LINC); School Specialty (SCHS); New Oriental Education & Technology Group (EDU); Princeton Review (REVU)

In the following brief excerpt from just one of the 14 interviews in the 57 page report, two top rated All Star equity analysts, Robert Craig and Jerry Herman, discuss the outlook for the sector and for investors.

TWST: As we look at over the next couple of years in this space, where are the growth opportunities for the operators?

Mr. Herman: It's a continuation of the already existing business model and that includes geographic expansion, new campuses; additional programs being offered, broadening out participation within the education hierarchy, and online. Those factors are all still relevant. Continued execution of that model and a continued market shift towards the for-profit sector should help drive growth. However, growth rates will not sustained at these levels. However, you can reason that the secular theme in this industry has perhaps been enhanced by President Obama's vision to make the US the most educated country in the world along with the realization that the traditional schools are having great difficulty in funding their respective institutions and students. The notion of market-funded education is probably one that's going to get quite a bit of discussion over the next few years we believe.

Mr. Craig: Based on the gist of your question, I think it's important to point out that we still regard this as a growth industry. Unlike some of the valuations that you see reflected in the marketplace currently, if you take a look at the long-term socio-economic and demographic trends, only 27% of students now are traditional students, and the for-Profit community specializes in serving the non-traditional students. The number of individuals over the age of 25 participating in post-secondary education is forecast to increase 20+% by the time we are in the 2015, 2020 timeframe. That again speaks to the target market for these companies, so this is still a growth business.

TWST: Although the growth coming off this spike maybe somewhat slower.

Mr. Craig: Correct.

TWST: You mentioned overseas expansion. I know that was a theme over a year or so ago. Is that still something the industry is looking at, despite the economies worldwide?

Mr. Herman: Yes. Most definitely there are a couple of good examples of that. Apollo Global, a joint venture between Apollo Group and the Carlyle Group has made some international investments, so far in point Chile, Mexico, and most recently the UK. Laureate, which was the public company that went private in 2007, and at some point, probably will come public again, has been very active internationally and now has roughly a half a million students, by its count even larger than Apollo Group and which has the vast majority of students in international markets. Likewise, the online market attracts a lot of international students as well. What's interesting is that, if you look at post-secondary education in the developing parts of the world, as much as 30% of post-secondary education is market-funded. We have established in this conversation earlier that here in the US, it's substantially less than that.

TWST: Is that a number the US can reach at some point?

Mr. Herman: 30 might take a while, but 20 would essentially more than double the current size of the business.

TWST: With that kind of growth looking out, is the industry able to find the staff they need to build the positions?

Mr. Craig: Yes. Certainly on a near-term basis, that's not expected to be a problem. There is no shortage of individuals who want to teach and that, by the way, speaks to a major concern. These companies are growing at very rapid rates and are they able to maintain educational quality doing so, and the real gating factor in maintaining quality is people. You need individuals to teach. You need individuals to run the campus infrastructure, and so on, and right now, that's not been a problem. If we go back to a point at which this economy is essentially at full employment, then depending on what sector you are in, some of those challenges might emerge, but right now, that's not a problem.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 57 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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