Mr. Maher: We do cover for-profit education and, principally, if you are talking about companies in the public sphere, that is postsecondary. And so what that means is companies like Apollo (APOL), DeVry (DV), ITT (ESI) and others in that sort, which are these days increasingly online, either as a significant share of the population or exclusively online. I do follow some other companies outside of that - K12 Inc. (LRN), which, as you might expect, operates in K-12; Princeton Review (REVU) and there are some other companies in education services. But principally I follow companies that are involved in instruction, whether it's postsecondary, primary school or like Princeton Review in test preparation.
TWST: How are these companies faring in this economy?
Mr. Maher: On a macro level, many of the companies, especially the postsecondary
ones, are actually very favorably responding to this circumstance because they
are countercyclical to a degree. And so when you look at the last year or so,
when unemployment really started to rise sharply and especially to rise sharply
among those without a college degree, you see that the interest in enrolling in
programs jumped significantly. And one of the best measures of that is the new
student population for the schools. The new student-starting programs jumped
substantially in the September and especially the December quarter last year.
The growth has remained really robust ever since. I think some of that is simply
that when you are looking at the alternatives for people who either have lost
their job or realized that in a stressful economic time they are looking to
improve their skills, going back to school is a nice alternative.
Tickers included in this excerpt: APEI, APOL, CPLA, DV, ESI, LOPE, LRN, REVU
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