For-Profit, Investors, University & College - Written by on Friday, June 17, 2011 18:43 - 0 Comments

Education Stocks Bounce Then Fade After Gainful Employment Ruling


Three fishermen under dark storm clouds at Bo-...


Education stocks enjoy a brief reprieve from the pressure of the pending legislation. The bounce was short lived after the looming ‘gainful employment’ ruling finally hammered home, in part because other issues still weigh the stocks down. Miriam Reimer for reports,

Analysts largely viewed the final ruling as less strict than expected for for-profit education providers — many schools won’t have to institute complete overhauls of their business practices as first feared — lifting stocks in the sector much higher in early trading.

Credit Suisse analysts are cautiously optimistic because aftershocks are still expected from the ruling.

Education Management, ITT Educational, Corinthian Colleges and Lincoln Educational(LINC) as the education providers likely to benefit the most from the final ruling. The group still holds risks, however, namely from student start declines, lower enrollment because of the negative impact of incentive compensation, rising competition and other headwinds.


Full piece at here.

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