10/28/2012

Short squeeze potential in this oversold stock: BPI (Bridgepoint Education)


BPI: Bridgepoint Education, Inc. provides postsecondary education services. It offers associates, bachelors, masters, and doctoral programs in the disciplines of business, education, psychology, social sciences, and health sciences.
This strong short squeeze potential has an improving capital structure and strong balance sheet. Michael Price and Joel Greenblatt reported addiding shares for the second quarter ending 06/30/12. 

Historically cheap valuations based on multiple metrics like sales or book value.  BPI was buying back shares, increasing cash and book value over the past 3 years.

Current Price = $9.80
Qtrly Revenue Growth (yoy):  6.80%
Enterprise Value/Revenue 0.19
Enterprise Value/EBITDA (TTM): 0.70
Market Cap:  520.85M
Enterprise Value:180.63M
52-Week Change:-54.55%
1 week return = -11.38%
6 month return = -51.38%
 Held by Insiders:  2.07%
% Held by Institutions1: 103.70%
Short % of Float (as of Oct 15, 2012):27.30%
Shares Outstanding:   52.88M
Float: 17.05M         

3 comments:

Anonymous said...

BPI is down for good reason.

There is a STRONG possibility that the business model is broken. The future of "for profit" education is not going to look like the past.

BPI in particular has some very bad publicity over their Ashford University.

Think about it. Who hires "graduates" of online universities? Nobody I know of.

Another factor to consider is why would you want to invest in something that is so destructive to society?

You can't have students saddled with $25k, $50k or more of NON-DISCHARGEABLE student loan debt that they borrowed on false information. There are LEGIONS of reports of recruiters promising jobs of $50k a year for graduates of these schools. Graduates come out and find they are lucky to get $9/hour jobs.

How do they repay the loans? They don't . They default. Upon default the government picks up the tab.

For profit education is largely a wealth transfer scheme from tax payers to these companies. Students are crushed in the middle.

Don't let the low valuation metrics fool you.

ShadowStock said...

Good points on all the useless and expensive degrees being offered at both online and traditional colleges.

But I will say this. I work with someone at a large Fortune 300 company that wanted his CPA. He was educated in Europe and felt it would help. So he decided to go online to save time. He went to University of Phoenix. Took the classes needed to sit for the exam and passed all 4 parts. I was wrong for discouraging him and his online experience paid off. But you are correct that many online degrees are worthless.

Thanks
John

Anonymous said...

John:

You are correct that not ALL of online, "for profit" education is a scam & ripoff.

I benefitted personally from a VERY expensive "for profit" review for my licensing. It was very focused & short nature.

In certain limited circumstances, with people who ALREADY have educations and are highly motivated, "for profit" can work out. I am going to guess that this is a VERY narrow slice of the market, perhaps less than 10%.

I don't have ANY problem with educators making a profit, as long as they provide a good product that is beneficial to the student.

In my experience though, the vast majority is worthless or worse. I have had employees who were damaged by "in person" for profit schools.

Think about this though...the "educators" get paid UP FRONT. They have NO RISK, and virtually no stake in the outcomes of their students. This is also true with "non-profit" schools.

I get so riled up by "education" because I went through so much "non-profit" and got worthless degrees. I have paid, and continue to pay, very dearly for my mistake.

I am going to get the word out and alert as many people as I can. Education needs reform NOW.