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Do you remember those 1970 commercials of the guy standing around in front of his Camaro wearing his Greg Brady pants and all these girls around him? The storyboard was something like that guy was in a dead end job flipping burgers and he went to ITT Technical School at night and now he is the epitome of success. I always wondered why all the girls wouldn’t be all mad at him. I mean let’s get real…the minute your girlfriend sees you giving another girl the time of day, you’re wearing her size 5 shoe across your head. With or without the shoe, or the girls, the guy still had the Camaro. That’s why I thought the ITT Technical School was awesome. I always figured why go to an Ivy League school when you can ITT Tech instead and get the Camaro.
Speaking of college, this is Trevor: http://www.youtube.com/watch?v=1doW_kjKgjE
Unfortunately, ITT Tech does not have a football team, or maybe the Trevonator could get a scholarship. But he has been looking at some other places, but he won’t get a Camaro.
Today I bought stock in ESI (ITT Educational Services) at a price of 108.11. I will sell it in 4 – 6 weeks at 125.41. I couldn’t resist the opportunity to get in on a dip. I love dip. Salsa. Hot cheese. French Onion….mmmmmmm. Why do I like ESI?
Here is a picture of ESI’s chart:
It looks really good for such a horrible market we’ve had. We’re at a new 6 year low…how about those apples?? Well, those apples are the reason I am buying stock in ESI. The hawk is out and people are losing jobs. They can’t get their old jobs back because their old jobs don’t exist anymore. They need to re-train, re-tool, get educated, get better, get the Camaro. ESI is a Camaro…its stock is up 150% in the last 12 months while its PE is only around 20.
ITT Educational Services, Inc. is a leading provider of career-oriented postsecondary degree programs in the United States based on revenue and student enrollment. The company offers associate, bachelor and master's degree programs and non-degree diploma programs to approximately 54,000 students at more than 100 ITT Technical Institutes located in 35 states.
The ITT Technical Institutes are institutions of higher learning that are committed to offering quality undergraduate, graduate and continuing education locally, nationally and worldwide to students of diverse backgrounds, interests and abilities. The institutions offer educational programs that integrate life-long learning with knowledge and skill to help students: -pursue their personal interests and objectives; -develop intellectual, analytical and critical thinking abilities, and -provide service to their communities. The programs employ traditional, applied and adult-learning pedagogies and are delivered through traditional, accelerated and distance methodologies in a learner-centered environment of mutual respect.
ESI management said the recession drove adults to seek career advancement through its associate, bachelor's and other degrees. Also, the prospect of federal stimulus dollars is boosting the sector. As the economy slowed, for profit education really accelerated both in terms of the demand for the product and in terms of the leverage that it was able to generate in the income statement. That momentum seems to be continuing even into this year. You are seeing the unit volumes rise, you are seeing the revenues per student, consisting of pricing and mix, increasing as well. There is acceleration taking place.
In a tough economic climate, prospective students become more interested in investing in themselves. It happens up and down the spectrum. At the vocational level, it's pretty straightforward. If there aren't $10-an-hour jobs at the mall, it looks a lot more appealing to go and study medical assisting or automotive technology so that you can get a high-paying hourly wage job. At the high end, it still applies. So if you are looking to complete your BA or get a Master's and you are either worried about your employment or facing unemployment, that's the time you get really serious about trying to beef up your resume. So typically in down cycles, ESI sees students coming back to school.
The thing that is an accelerant to that is the fact that in this downturn, the media environment is really deteriorating rapidly. So that means that education companies, which still have money to spend on media, are able to acquire media less expensively and their dollars are going a lot farther. So ESI is getting both the benefit in terms of increased demand as well as more leverage at the operating margin line.
"We're as optimistic as we've ever been,"ITT Chairman and CEO Kevin Modany told analysts in a post-earnings conference call. Last quarter’s profits were smoking.
Quarterly profit rose 34% to $1.61 a share — 17 cents over views. Revenue climbed 21% to $279.8 million.
Enrollment at ITT's 114 locations climbed to 61,983, up 16.9% vs. the end of 2007, with an even larger bump in first-time students.
Full-year revenue topped $1 billion for the first time. EPS jumped 39% to $5.17.
The credit crunch hammered education firms in early 2008. So ITT began lending to its students. Hey..anyone can be a bank. If you have money, you lend it to people with good credit. How hard is that? Better ask Citibank…..why did I buy stock in that company? I should have listened to Skiracer and New Born Baby…but I digress. Students really believe in the value proposition and the return on their money of investing in a degree and they are willing to borrow if they can.
The Title IV programs that offer federal guaranteed loans to students are pretty solid and the politicians have worked hard to make sure that there has not been any kind of a gap there. But the private financing market is much tougher and the standards that the private lenders are using are rising in real time much as they are in other areas of consumer lending. And so what has happened is that a number of the companies that do have a gap between what Title IV covers and the full cost of tuition have had to get into the business of lending to their own students.
House Democrats' $825 billion stimulus plan has $15.6 billion to boost the Pell Grant, a key federal aid to lower-income students. If that passes, it could cut, or possibly end, ITT's need to lend. That could boost 2009 results further.
Ok..speaking of results, what do we have? Well, the ANAL-ysts say that ESI will earn $6.49 per share in 2009. That’s a 25% growth in earnings over what they actually did in 2008. That’s a pretty bold call I must say for the ANAL-ysts. But remember, ESI has been kicking their butt every quarter and have surprised on the upside by an average of 15%. So let’s take the ANAL-yst’s number and increase it by 15%. That gets us to $7.46/share. If you take today’s PE ration of 20, and multiply it by the earnings projection of $7.46/share, you get a stock price of $149.20. Well that’s a lot higher than my sell price of $125.41, so I’m feeling pretty good about this purchase.
ESI plans to add new institutes and learning sites of existing institutes at locations throughout the United States. They determine locations for new institutes and learning sites based on a number of factors, including demographics and population and employment growth. ESI says it will open six to eight sites in 2009.
This isn't the first time a new breed of institution has challenged higher education. In the mid-19th century, Congress created low-tuition land-grant universities, schools such as Iowa State University and Ohio State University, to expand access to college while teaching practical subjects such as agriculture and engineering. In the 1950s and '60s, community colleges boomed in response to rising demand. Now, for-profits are opening doors to higher education even further. As they continue to grow, they may well force some of the weaker traditional colleges to improve or implode. Either way, higher education should benefit. But can Trevor play for them?????
I am HUGE!!!
$$$MR. MARKET$$$
http://www.mrmarketishuge.com
Speaking of college, this is Trevor: http://www.youtube.com/watch?v=1doW_kjKgjE
Unfortunately, ITT Tech does not have a football team, or maybe the Trevonator could get a scholarship. But he has been looking at some other places, but he won’t get a Camaro.
Today I bought stock in ESI (ITT Educational Services) at a price of 108.11. I will sell it in 4 – 6 weeks at 125.41. I couldn’t resist the opportunity to get in on a dip. I love dip. Salsa. Hot cheese. French Onion….mmmmmmm. Why do I like ESI?
Here is a picture of ESI’s chart:
It looks really good for such a horrible market we’ve had. We’re at a new 6 year low…how about those apples?? Well, those apples are the reason I am buying stock in ESI. The hawk is out and people are losing jobs. They can’t get their old jobs back because their old jobs don’t exist anymore. They need to re-train, re-tool, get educated, get better, get the Camaro. ESI is a Camaro…its stock is up 150% in the last 12 months while its PE is only around 20.
ITT Educational Services, Inc. is a leading provider of career-oriented postsecondary degree programs in the United States based on revenue and student enrollment. The company offers associate, bachelor and master's degree programs and non-degree diploma programs to approximately 54,000 students at more than 100 ITT Technical Institutes located in 35 states.
The ITT Technical Institutes are institutions of higher learning that are committed to offering quality undergraduate, graduate and continuing education locally, nationally and worldwide to students of diverse backgrounds, interests and abilities. The institutions offer educational programs that integrate life-long learning with knowledge and skill to help students: -pursue their personal interests and objectives; -develop intellectual, analytical and critical thinking abilities, and -provide service to their communities. The programs employ traditional, applied and adult-learning pedagogies and are delivered through traditional, accelerated and distance methodologies in a learner-centered environment of mutual respect.
ESI management said the recession drove adults to seek career advancement through its associate, bachelor's and other degrees. Also, the prospect of federal stimulus dollars is boosting the sector. As the economy slowed, for profit education really accelerated both in terms of the demand for the product and in terms of the leverage that it was able to generate in the income statement. That momentum seems to be continuing even into this year. You are seeing the unit volumes rise, you are seeing the revenues per student, consisting of pricing and mix, increasing as well. There is acceleration taking place.
In a tough economic climate, prospective students become more interested in investing in themselves. It happens up and down the spectrum. At the vocational level, it's pretty straightforward. If there aren't $10-an-hour jobs at the mall, it looks a lot more appealing to go and study medical assisting or automotive technology so that you can get a high-paying hourly wage job. At the high end, it still applies. So if you are looking to complete your BA or get a Master's and you are either worried about your employment or facing unemployment, that's the time you get really serious about trying to beef up your resume. So typically in down cycles, ESI sees students coming back to school.
The thing that is an accelerant to that is the fact that in this downturn, the media environment is really deteriorating rapidly. So that means that education companies, which still have money to spend on media, are able to acquire media less expensively and their dollars are going a lot farther. So ESI is getting both the benefit in terms of increased demand as well as more leverage at the operating margin line.
"We're as optimistic as we've ever been,"ITT Chairman and CEO Kevin Modany told analysts in a post-earnings conference call. Last quarter’s profits were smoking.
Quarterly profit rose 34% to $1.61 a share — 17 cents over views. Revenue climbed 21% to $279.8 million.
Enrollment at ITT's 114 locations climbed to 61,983, up 16.9% vs. the end of 2007, with an even larger bump in first-time students.
Full-year revenue topped $1 billion for the first time. EPS jumped 39% to $5.17.
The credit crunch hammered education firms in early 2008. So ITT began lending to its students. Hey..anyone can be a bank. If you have money, you lend it to people with good credit. How hard is that? Better ask Citibank…..why did I buy stock in that company? I should have listened to Skiracer and New Born Baby…but I digress. Students really believe in the value proposition and the return on their money of investing in a degree and they are willing to borrow if they can.
The Title IV programs that offer federal guaranteed loans to students are pretty solid and the politicians have worked hard to make sure that there has not been any kind of a gap there. But the private financing market is much tougher and the standards that the private lenders are using are rising in real time much as they are in other areas of consumer lending. And so what has happened is that a number of the companies that do have a gap between what Title IV covers and the full cost of tuition have had to get into the business of lending to their own students.
House Democrats' $825 billion stimulus plan has $15.6 billion to boost the Pell Grant, a key federal aid to lower-income students. If that passes, it could cut, or possibly end, ITT's need to lend. That could boost 2009 results further.
Ok..speaking of results, what do we have? Well, the ANAL-ysts say that ESI will earn $6.49 per share in 2009. That’s a 25% growth in earnings over what they actually did in 2008. That’s a pretty bold call I must say for the ANAL-ysts. But remember, ESI has been kicking their butt every quarter and have surprised on the upside by an average of 15%. So let’s take the ANAL-yst’s number and increase it by 15%. That gets us to $7.46/share. If you take today’s PE ration of 20, and multiply it by the earnings projection of $7.46/share, you get a stock price of $149.20. Well that’s a lot higher than my sell price of $125.41, so I’m feeling pretty good about this purchase.
ESI plans to add new institutes and learning sites of existing institutes at locations throughout the United States. They determine locations for new institutes and learning sites based on a number of factors, including demographics and population and employment growth. ESI says it will open six to eight sites in 2009.
This isn't the first time a new breed of institution has challenged higher education. In the mid-19th century, Congress created low-tuition land-grant universities, schools such as Iowa State University and Ohio State University, to expand access to college while teaching practical subjects such as agriculture and engineering. In the 1950s and '60s, community colleges boomed in response to rising demand. Now, for-profits are opening doors to higher education even further. As they continue to grow, they may well force some of the weaker traditional colleges to improve or implode. Either way, higher education should benefit. But can Trevor play for them?????
I am HUGE!!!
$$$MR. MARKET$$$
http://www.mrmarketishuge.com
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