Strayer Stock Looks Up with New Management
Royce, Kate, The Washington Times (Washington, DC)
Byline: Kate Royce
A new management team means a new direction for Strayer Education Inc.'s stock.
The company's new management team includes a former businessman and a former vice chancellor of a state university system. Analysts say their combined work backgrounds and the aggressive growth plan they implemented helped the stock pick up momentum.
"When Strayer's former president and chief executive officer bought the school in 1989, it was a three-school chain," says Mark Farano, an analyst with First Analysis Securities in Chicago. "When he retired in June, he brought it up to a 14-school chain."
Mr. Farano says Strayer Education's new plans are to open three new schools per year.
Strayer Education Inc. is the D.C. holding company for Strayer University and Education Loan Processing. The university offers college courses in Maryland, Virginia and the District, while the loan program offers Strayer students financial aid in the form of low-interest loans. The company also offers its classes via the Internet.
The stock was trading as low as $17.50 on Oct. 2, but flew up to $54.70 on July 26. The stock closed at XX.XX on the Nasdaq on Friday.
Strayer's revenues for the second quarter ended June 30 increased 17 percent to $23.8 million from $20.3 million for the like quarter the year before. Net income increased 13 percent to $14.4 million (95 cents per diluted share) from $12.7 million (82 cents) for the like quarter the year before. Diluted shares reflect the value of options, warrants and other securities convertible into common stock.
"In investors' eyes, the company's benefiting from being part of a regulated industry," Mr. Odening says. When schools are first formed, they cannot immediately use federal aid loan programs to attract students, he says. …