A cabbie’s life, treacherous bike riding, RVs are some people’s heaven, the trolley at night, big rigs near Rosecrans, why we drive freeways, a bus driver’s day, and this skateboarder knows San Diego
Various Authors 4:09 p.m., May 27
For-profit education stocks got walloped today (March 4) after Senate Democrats proposed a bill that would strengthen the Department of Education's oversight of these controversial entities. According to Yahoo, the legislation would require the department to conduct reviews of colleges that spend more than 20% of revenues on recruiting and get more than 85% of revenue from from federal student aid programs. Bridgepoint Education dropped 3.43% to to $9.87. Strayer Education dropped 4.11% and Career Education 9.33%. Bridgepoint is notorious because it spends more on recruitment than it does on education; it gets more than 90% of its funds from the federal government, including the military.
Senate investigating committees, the Department of Education, and scholars in the education field basically say Bridgepoint is ripping off students and U.S. taxpayers. I have been writing for years that it is a completely unethical operation. But Wall Street is amorality incarnate. A stock of an opium den, brothel, snuff-film maker, Murder Incorporated would rise if the numbers looked enticing. Bridgepoint is priced for liquidation. The company has no debt, a 21.3% return on assets, 32.67% return on equity, $334.6 million in cash, and the stock sells for merely 4.1 times its latest 12-month earnings. But two different accrediting organizations eye Bridgepoint's major operation (Ashford University) warily, and the Justice Department and Department of Education are probing it. The question is whether the government would have the guts to close it down, or the accrediting agencies would thumb it down, essentially snuffing it out. If the past is pertinent, Bridgepoint will get a bit more than a wrist slap. The feared legislation is not likely to pass; Republicans claim they are watchdogs of the public purse but look the other way when for-profit education companies pilfer federal funds. At some point, the stock of this dubious company could explode to the upside as it has before, even though the tremendous earnings momentum is likely to reverse in coming quarters.