Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Strayer Education (NASDAQ: STRA) were moving to the head of the class today, jumping as much as 33% after a blowout fourth-quarter earnings report.
So what: The for-profit educator flew past EPS estimates of $0.98, posting a per-share profit of $1.32, while sliding revenues also beat expectations as sales declined 12.5%, to $124.1 million, against the consensus at $119.3 million. That wasn't the only good news, however, as new student enrollment seemed to be bottoming out. While overall student enrollment fell 14%, new student entrants declined only 2%, indicating that the company's revenue drop may soon be coming to an end.
Now what: Education stocks have gotten banged up over the last couple of years, but declining enrollments seem to be easing as the Strayer report indicates. The company also completed a restructuring initiative that will save $50 million a year, starting in 2014, which should further bolster the bottom line. Strayer still trades at a P/E under 10 even after today's jump as the market has been expecting its numbers to continue to go south, but this was the second strong earnings beat we've seen in a row. Profits could start improving faster than the market thinks.
What else will crush it in 2014?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.