Corinthian Colleges and DeVry Surge as Pell Grant Program Expected to Run a Surplus in 2013 and 2014
Five Star Equities Provides Stock Research on Corinthian Colleges and DeVry
NEW YORK, NY -- (Marketwire) -- 02/13/13 -- Shares of for-profit education companies surged last week after industry bellwether DeVry Inc. reported strong fourth quarter results. The Bloomberg U.S. For-Profit Education Index (USEDU) has gained over 7 percent year-to-date. Five Star Equities examines the outlook for companies in the Education & Training Services Industry and provides equity research on Corinthian Colleges Inc. (NASDAQ: COCO) and DeVry Inc. (NYSE: DV).
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For-profit educators were also boosted by a report from the Congressional Budget Office that showed the Pell Grant Program, which provides need-based grants to low-income undergraduate students, is on pace to run a surplus in 2013 and 2014. There had been many experts within the industry that had expected a budget deficit accompanied by budget cuts.
"In a fiscal environment where unbudgeted programs are all under intense scrutiny, we believe this is a major victory for college students, but in particular for-profit students, who are more likely to be eligible for Pell funding as a result of lower incomes and financial independence," said William Blair & Co. analyst Brandon Dobell.
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Corinthian is one of the largest post-secondary education companies in North America. The company has 113 Everest, Heald and WyoTech campuses, and also offers degrees online. Total student population at December 31, 2012 fell 2.4 percent to 88,688, compared to 90,910 a year prior. Net revenue increased 4.5 percent year over year to $409.7 million in the fourth quarter.
DeVry is a global provider of educational services. DeVry University is one of the largest, private sector universities in North America, with more than 74,000 students enrolled in the United States and Canada. The company reported net income surged to $50 million for the fourth quarter of 2012, compared to a net income of $9 million in the year ago quarter.
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