With that in mind, let's take a closer look at Strayer's business, and see what CAPS investors are saying about the stock right now.
Strayer facts
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Headquarters (founded)
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Arlington, Va. (1892)
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Market Cap
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$2.54 billion
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Industry
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Education Services
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Trailing-12-Month (TTM) Revenue
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$396.3 million
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Management
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CEO Robert Silberman (since 2001)
COO Karl McDonnell (since 2006)
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TTM Price-to-Earnings (STRA and S&P 500)
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31.7 and 14.1
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Competitors
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Apollo Group (Nasdaq: APOL)
DeVry (NYSE: DV)
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CAPS members bearish on STRA also bearish on
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General Motors (NYSE: GM)
salesforce.com (NYSE: CRM)
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CAPS members bullish on STRA also bullish on
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Google (Nasdaq: GOOG)
General Electric (NYSE: GE)
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.
Over on CAPS, some 39% of the 88 All-Star members who have rated
Strayer believe the stock will underperform the S&P 500 going
forward. Among the entire bear population are greenwave3 and All-Star TheHuney, who is ranked in the top 0.5% of our community.
In late January,
greenwave3 wrote that the Strayer bear case boiled down to price: "A
clean balance sheet, but the P/E and P/book are not supported by
attractive metrics. Loan defaults amid a deteriorating economy are a
source of worry."
Last month, TheHuney schooled a Strayer bull to the many risks that remain:
It's not going to grow at 20% per year with 10%
unemployment. People are speculating that the for-profit ed companies
somehow benefit from the poor economy, but it's just the opposite. Most
of their students already work full-time and they use these companies
in order to get a degree on extremely flexible terms. Anyone who is
unemployed and has a brain is going to go to a state university and pay
lower tuition; a state degree is more valuable anyway.
Plus,
people fail to note the two major reasons these for-profit eds have
taken off is because (a) an overly friendly administration that
overlooked some of the shadier practices in the sector and (b) the
booming economy that pretty much guaranteed that people with junk
degrees could get jobs with that degree.
Copyright © 2009 Universal Press Syndicate.
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