10:41 Color on stock action: Education stocks
Education stocks, which have been one of the strongest groups in the market on the back of blow-out results from APOL and ESI, as well as reports that the new stimulus package being negotiated in Congress will contain increases in education spending, are seeing notable relative weakness this morning. The sell-off was likely due to a cautious note from a tier-1 firm out this morning, which highlighted concerns that the Senate stimulus bill will not include the $2,000 annual increase to federal Stafford loan limits. Of lesser importance, but worth mentioning nonetheless, we also note that there was some skeptical commentary about the group in Barron's, which focused almost exclusively on the group's excessive (in the author's mind) valuation at 20x earnings; and there was also some sizeable insider sales disclosed by APOL execs. Most likely, all of these factors were the excuse that market participants needed to take some well-deserved profits in the these names, especially since another catalyst is just around the corner with DV's report tomorrow. (ESI -12.6%, COCO -7.1%, CECO -6.5%, APOL -5.3%, STRA -3.6%, DV -3.0%, EDU -0.7%, CPLA -0.5%, etc) |
