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NEW YORK (Dow Jones)--Educational stocks are getting hit by DeVry Inc.'s (DV) first-quarter warning Friday, with investors worried that DeVry's declining enrollment could spread to other companies.
DeVry shares are off 30%, or $5.52, at $12.90 on volume of 2.7 million compared with average daily volume of 340,500.
Analysts, however, brushed off the concern, maintaining that DeVry's problems are largely its own. In a prepared statement Friday, technology-focused DeVry blamed its lagging enrollment on the "ongoing effects of the technology recession."
Other companies with more diverse curriculums are able to pick up the slack with other course offerings, analysts said.
"One of the key points that we've always liked in some of the names have been diverse curriculum," said Richard Close, analyst at SunTrust Robinson Humphrey. A company might have one curriculum do well and another doing not as well, he continued.
Educational stocks have, for the most part, reported solid results for the past two years and most companies have exceeded expectations, the analyst said.
Close does not own shares of the any of the educational stocks he covers, but said SunTrust has had investment banking relationships with Education Management Corp. (EDMC) and Corinthian Colleges Inc. (COCO).
U.S. Bancorp Piper Jaffray analyst Mark Marostica agreed that DeVry's woes are unique and said in a note Friday that he views the group's weakness as a buying opportunity.
Corinthian Colleges stock is down 9.5% to $32.48 while share of Career Education Corp. (CECO) are off 12.9% to $42.17. Apollo Group Inc. (APOL) shares are down 5.6% to $40.35 while those of Education Management are off 5.7% to $41.79.
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