Sell-off in education stocks creates attractive valuations -- Barron's Online
Barron's Online highlights the education sector after its recent sell-off. The article says the real story may be the industry's potential long-term enrollment growth. For-profit educational institutions are more nimble than traditional colleges at meeting demand for, say, training as a medical technician so they can respond to market conditions more quickly and take market share from traditional institutions. And the selloff has made some of the stocks' valuations look pretty reasonable. DeVry (DV 24.03) is trading at a discount to its median p/e of 30.1x projected earnings. A portfolio manager puts its intrinsic value at $31. Jefferies says Corinthian (COCO 51.82) has been unfairly dragged down by the controversies as it trades at a slight discount to its median historic forward P/E of 28x. S&P thinks the stock could reach $76 in 12 months.
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