Corinthian Colleges Inc (COCO)

(Top Pick May 19/10, Down 72.70%) Gov’t funding issue. Most students need funding to get into programs. This was an industry fall.

All “for-profits” colleges have been under pressure. Dept of Ed keeps changing rules requiring financial thresholds to continue getting funding and also want to tighten up recruitment incentives for colleges. Trading at 5X next year's earnings in a high unemployment environment. Over 100,000 students in over 100 campuses and are doing extremely well. Market has overreacted.

For-profit education company, mainly post-high school with degrees and some master programs. Stock has not been able to get any traction since concerns of default of students’ government loans. Earnings growing at 18%-20%. Trading at about 7-8 times earnings.

(A Top Pick Jan 14/09. Down 5.9%.) Down because of regulatory overhang. 93,000 students and growing very well. $2.25 per share in cash. No debt. Expecting $1.58 in earnings this year and $1.75 next year.

College. When unemployment spikes, you see a lot of people going back to school. Has operations in the US and Ontario. About 70,000 students. They have fixed costs so every incremental dollar made flows straight to the bottom line. Manageable debt.