| Stock (Symbol) |
Stock Price |
Bridgepoint Education (BPI)
|
$15
|
| Data is as of |
Expected to Report |
Sector |
September 10, 2010
|
Nov 8
|
Education
|
| Company Description |
|
Bridgepoint Education, Inc. (Bridgepoint) is a accredited provider of postsecondary education services. The Company offers associate’s, bachelor’s, master’s and doctoral programs in the disciplines of business, education, psychology, social sciences and health sciences. It delivers its programs online, as well as at its traditional campuses located in Clinton, Iowa, and Colorado Springs, Colorado. As of December 31, 2009, it offered approximately 1,150 courses, 60 degree programs and 125 specializations and concentrations. As of December 31, 2009, it had 53,688 students enrolled in its institutions, 99% of whom were attending classes online.
|
| Sharek’s Take |
 The education stocks had a really rough summer. The Department of Education (DOE) is threatening to take away student aid if 45% of ex-students aren’t paying interest AND principle on their student loans.During the past Spring and early Summer, BPI was selling of hard — I suspect because lots of investors felt the school wouldn’t pass the test. Instead the company hit the 45% mark on the head. The stock proceeded to go up the day after the results were announced, then the rally faded and the stock sold off, sending BPI to 52-week lows (I think mutual funds just dumped anything education related). Now we are sitting with a good stock in an awful sector. It will take some time for BPI to get back to where it should be. Patient investors could be looking at significant upside. |
| One-Year Chart |
| Looking at the one-year chart, profit growth is solid and the P/E of 7 makes a double or triple conceivable. I’m thinking (hoping) the lows have been set and now the dust can clear for this stock to head higher. |
 |
| Profit Growth |
Earnings Table |
| Last quarter BPI had profit growth of 71%. Revenues grew 57%. This company is one of the fastest growing anywhere, and if BPI is providing a good education then this stock could rebound in a big way. |
 |
| Beat the Street |
| BPI beat by 8 cents last quarter and during the last four quarters the company has been exceptional at beating the street. Management came from University of Phoenix, which when it was public as UOPX was a top stock in the stock market. |
| Annual Profit Estimates |
| Annual estimates increased a little for 2010 and 2011 but 2012 estimates declined. I’m seeing 2012 estimates decline in other publicly traded schools too. |
| Future Quarters |
| Estimates declined somewhat but other than the 2QtrsOutEst profit growth looks to be solid ahead. Remember BPI has a history of beating the street, and the average growth during the next four quarters is 26% — this company could grow profits 30% or more in the next year. |
| Fair Value |
| I’d love to give BPI a fair value of 25 times earnings, but with the storm clouds above even 20 times earnings is high. Let’s hope for a P/E of 15, if that happens within a year then we can move the fair value P/E higher. |
 |
| Ten-Year Chart |
| Bridgepoint went public in April 2009. The stock’s had two big swings higher and two quick dips lower. There’s good support around the $15 level and if BPI starts heading to its fair value of $30 it will encounter resistance at $27-28.This stock has tremendous raw potential. But I feel the stock’s small market cap and shaky sector can cause huge swings in the stock price. |
 |
| Power Ranking |
Bottom Line |
Growth Portfolio
16 of 17
|
Bridgepoint Education is currently ranked 16 of 17 stocks in the Growth Portfolio Power Rankings. I’ve done a lot of research on this company and feel its a fine investment. Most investors do not agree, as the stock is well below where I purchase it. BPI has exceptional upside but government risk is attached. We have to wait for the tide to turn. BPI is also a member of the Aggressive Growth Portfolio, and is ranked 10th among ten stocks. Bridgepoint passed the test from the Department of Education, now its up to investors to take notice. |
Aggressive Growth Portfolio
10 of 10
|
