You may have seen a lot of relatively unknown symbols flashing across the tape today, especially in the pre-market.
The beleaguered "for-profit education" sector caught a break today, with U.S, Dept. of Education proposed new regulations coming in less harshly than expected. The industry has been under fire for well over a year, with the sector down around 40% since April of 2010.
The issue concerns whether or not future students at the schools will qualify for federal aid, with complex formulas based on prior enrollees repayment records as a population.
The new regulations were more lenient than most expected and many names in the segment popped by double-digits today, led by Corinthian Colleges (COCO) +26.8% and Strayer Education (STRA) +18.9%. Volumes ran as high as 10 times normal averages.
Some other names in the sector include APEI, EDMC, APOC, CECO, CPLA, BPI, NAUH, DV, LOPE, AND LINC.
According to one report:
"Under the new ruling, many schools will be free to raise tuition fees and return to aggressive admission strategies. But earnings for 2011 will be down as many for-profit colleges saw a sharp drop in enrollment in the last year, despite lowering admissions standards."....leaving the overall outlook for the industry still not quite yet out of the woods.
Corinthian Colleges - Last 12 Month
Strayer Education - Last 12 Month
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The Underground Trader posts are authored by a long-time friend and colleague who specializes in trading futures and options. The Underground Trader is a very close watcher of the indices and is a market junkie who cruises message boards, trading groups, news feeds and opinion sites for any edge he can get. Do not bet the ranch on any of his comments but they are usually interesting and definitely food for thought.
Disclosure - Positions in securities mentioned: none
Note: Observations by the Underground Trader should not be construed as trade recommendations, but rather are reports on marketplace activity and his view on the subject.
