Zeev's Turnips Patch-No Politics (ZEEV)

[Train Guy]

Investors scold school stocks after "light" earnings report

For much of the past year, Career Education (CECO) has played the investor's pet, rising from just over $40 a year ago to about $70 by the end of June. The catalyst was burgeoning demand for the company's online-education services. But over the past month, the company has found its shares languishing in detention hall. First came the announcement of an SEC investigation, which sent shares tumbling in early July. Then came Wednesday's earnings announcement. The company said online student enrollment rose to 17,600 from 7,000 in the same quarter of last year. But it was shy of the 17,800 estimate, according to Mark Marostica, a Piper Jaffray analyst. "The second quarter student population comes in a bit light," Marostica said in a research note. With the specter of an SEC investigation hanging over the company, investors decided a "bit light" was a bit much, and they sent the shares plunging to $33, near the company's 52-week low.