As part of our exclusive 57 page education report we conducted a roundtable forum with BRANDON DOBELL of  William Blair & Company, LLC  and COREY GREENDALE of First Analysis Securities Corporation . Mr Greendale gave this advice to investors;

Mr. Greendale: Overall, we think the valuations in the sector are still suppressed by regulatory concerns that we think are overblown. We think there are a lot of things going for the sector. The community colleges are underfunded, all the economic factors we talked about that are driving people back to school, funding sources are increasing, like the Pell Grant and the new GI bill. So we think it’s a good time to be investing in the education sector. While there are some variations by company, the valuations are still attractive by historical standards because of all these potential regulatory concerns that we think are overblown.

Both believe postsecondary companies will continue to grow even as the economy begins to recover, emphasizing that many who have lost their jobs in the last two or three years were in positions that may take a long time to come back, thus accelerating or exacerbating the need for re-skilling. Both also underline the need for for-profit education companies to be more transparent and forthcoming with data regarding outcomes. Given a secular trend towards more education and today’s knowledge- and information-based economy, Mr. Dobell and Mr. Greendale are both very positive on this sector and believe this group will see increasing numbers over the next 12 months.

Companies mentioned: SkillSoft plc (SKIL); Rosetta Stone Inc. (RST); American Public Education Inc. (APEI); Apollo Group Inc. (APOL); Bridgepoint Education Inc. (BPI); Career Education Corp. (CECO); Capella Education Co. (CPLA); DeVry Inc. (DV); ITT Education Services Inc. (ESI); Grand Canyon Education Inc. (LOPE); Strayer Education Inc. (STRA); Blackboard Inc. (BBBB) and Universal Technical Institute Inc. (UTI).

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This entry was posted on Tuesday, September 8th, 2009 at 8:37 am and is filed under Consumer Stocks. You can follow any responses to this entry through the RSS 2.0 feed.