4-Star Stocks Poised to Pop: K12

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online public school operator K12 (NYSE: LRN  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at K12's business and see what CAPS investors are saying about the stock right now.

K12 facts

Headquarters (Founded)

Herndon, Va. (2000)

Market Cap

$1.2 billion

Industry

Education services

Trailing-12-Month Revenue

$482.5 million

Management

Founder/CEO Ronald Packard

CFO Harry Hawks

Return on Equity (Average, Past 3 Years)

11.4%

Cash/Debt

$40.1 million / $25.0 million

Competitors

Apollo Group (Nasdaq: APOL  )

DeVry (NYSE: DV  )

Strayer Education (Nasdaq: STRA  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 95% of the 206 members who have rated K12 believe the stock will outperform the S&P 500 going forward. These bulls include Blackarrow1969 and djnitrogen.

Late last month, Blackarrow1969 helped school Fools on the opportunity:

I earned a Master's degree online a couple of years ago. I see plenty of potential for this at the K-12 level, as something to help with home schooling. American public schools are awful, and online learning may help those who wish to escape it. Consider this a long-term investment.

Over the next five years, in fact, K12 is expected to grow its bottom line at a brisk rate of 27% annually. That's much faster than listed competitors like Apollo (7%), DeVry (12%), and Strayer (9%).

CAPS member djnitrogen elaborates on the K12 bull case:

Clear leader in the field.
High growth.
Only has scratched the surface of a very very large market.
Great management.
Few analysts covering it.
Scalable Internet based business model.
Local governments are in financial trouble and this is a more cost effective manner to deliver education for K-12 students. This will bode well for K12.

What do you think about K12, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of K12. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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