Let’s imagine this, the great depression days, the dot com bust, and now the credit crisis – what has usually happened each time after the worst in the economy crops up. Well, the man who gets bogged down by an employer and goes home to sulk is not the one who has learnt a lesson and emerges a winner. We have often heard of the story of the carpenter who proves to be well is the one who keeps his saw sharpened (Of course, now we have electronic saws!!). The parallel for us in the current world is to look inward to hone our skills in these challenging times and emerge well prepared for a new world order when normalcy is restored. We would certainly witness a huge influx of candidates rushing back to school for higher studies, in order to prepare for a new financial world order. Let’s look at some stocks which might make a good pick in the education industry who would be a benefactor of these arguments.
DeVry (NYSE:DV) owns and operates DeVry University, Advanced Academics, Ross University (provider of medical and veterinary medical education), Chamberlain College of Nursing (offers several nursing degree and degree completion programs at its four campuses in United States and online), and Becker Professional Review (prepares candidates for the Certified Public Accountant (CPA) and Chartered Financial Analyst (CFA) professional certification examinations, and offers continuing professional education programs and seminars in accounting and finance). DeVry University offers associate, bachelor’s and master’s degree programs in technology, healthcare technology, business, and management. In September 2008, DeVry announced that it had completed its acquisition of U.S. Education, the parent organization of Apollo College and Western Career College. Some of the winning streaks we see of this stock is the stellar earnings results it has announced recently. Revenue of $303.7Mn was up 21.3% versus prior year. Reported net income of $34.8Mn in the first quarter was up $8Mn or about 30% versus prior year. Earnings per share of $0.48 increased $0.11 versus last year but note that fiscal 2008 first quarter results included a loss of $2.3Mn net of tax or about $0.03 a share from the sale leaseback transactions at Phoenix, Seattle and Alpharetta. Earnings per share were up 20% excluding this discrete item on a more apples to apples basis of comparison. The medical and healthcare segment revenue was up 43.1% in the quarter or 28.1% excluding the impact of acquisition of U.S. Education. This growth was driven by Ross enrolments and Chamberlain’s geographic expansion into Illinois and Arizona along with accelerated growth of the online RN to BSN program.
ITT Educational Services (NYSE:ESI) a leading provider of technology-oriented post secondary degree programs.
