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 Education Management Corporation (NASDAQ: EDMC) and Apollo Group (APOL) were headed to the top of the class today, gaining as much as 10% on a strong day for for-profit educators.
So what: ITT Educational Services (ESINQ) reported earnings earlier this morning, shooting up 30%, and earlier this week, Capella Education (CPLA) jumped 15% after reporting, and is now approaching a new 52-week high. The education sector has gotten hammered over the last couple of years, but investors seem to be getting the feeling that enrollment numbers are bottoming. One exception was DeVry (ATGE 0.43%), which fell sharply after reporting earnings earlier this week, but still managed to gain 5.8% today.
Now what: This industry tends to move on lockstep, as the companies are little-differentiated, giving potential to the same marketing pitch and providing the same areas of study. Of the three schools above that have reported, only Capella showed an actual increase in new student enrollment. I'd like that number coming up across the board before getting invested. Keep an eye on Education Management, which reports on May 2. Apollo Group does not report until June 24.
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