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: For-profit educator ITT Educational Services (NYSE: ESI) leapt out of the gate Thursday morning, its shares skyrocketing 11% in response to first-quarter earnings numbers that, while not great, at least exceeded expectations.

So what: For-profit educators have had a rough time lately. They've been excoriated in the press and on PBS. The Department of Education is on the warpath, cracking down on the use of federal student loans to pay for tuition at for-profit schools. As purse strings tighten, industry leader Apollo Group (Nasdaq: APOL) has seen enrollment fall as much as 40%, and investors were predicting a 14% fall in enrollment at ITT in the first quarter. Instead, enrollment dropped only 5.6%.

Now what: As I said, while not as bad as feared, the news still wasn't great. Revenues at the company flatlined, for example. Still, earnings did grow (to $2.91 per share), and at a current valuation of barely 6 times earnings, ITT shares will look awfully cheap if the company can manage to maintain any growth whatsoever.  (And analysts are looking for at least 7% annual growth over the next five years.)

In short, the shares are certainly "cheap for a reason" -- but while bearing in mind the reasons, don't overlook the fact that they are cheap.

Is "cheap" a good enough reason to own ITT Educational? Add ITT to your Watchlist, and watch how the story develops.

Fool contributor Rich Smith does not  have any position in any company named above. The Motley Fool has a disclosure policy.

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