Why Shares of Career Education Corp. Plummeted

Is this meaningful or just another movement?

May 8, 2014 at 2:24PM

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 Career Education Corp. (NASDAQ:CECO) were getting sent to detention today, falling as much as 30% after a forgettable first-quarter earnings report.

So what: The for-profit educator saw its enrollment decline as total students fell 12% to 55,700, while the number of new students dropped 6% to 16,030. As a result, its net loss per share from continuing operations expanded from $0.30 a year ago to $0.71, worse than estimates of a $0.42-per-share loss. Revenue dropped 14.6% to $243.1 million, also missing the consensus at $261.9 million. 

Now what: Despite the underwhelming performance, CEO Scott Steffey said the year was off to a "good start" and said management was focused on efforts to transform the company. There were also positives in the quarter including a sequential improvement in the enrollment decline, and a 32% improvement in its new student conversion rate. Still, the big misses on top and bottom lines highlight how far Career Education Corp. is from profitability. Pay attention to new student enrollment going forward as that figure could soon turn positive, which would help drive a turnaround for the company.

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Jeremy Bowman has no position in any stocks mentioned, and neither does The Motley Fool. 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 Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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