Checking back on Apollo Group (APOL)
Talk about calling the perfect top in a stock. Back in 2009, we penned an article titled: It’s time to short Apollo Group, Inc. (APOL)
If you had brass balls and shorted it based on our recommendation, you would have watched shares fall from $82.35 all the way to $16.20 today.
It made a lot of sense at the time. Back in 2008, a year which was horrible for most stocks, produced a 100% gain in Apollo. It was only a matter of time before the financial crises caught up with Apollo.
Just look at these charts comparing 2009 to today:
Looking at today's charts, some investors may be looking to bottom fish this stock.
Is Apollo a value play?
The short answer is no.
Unfortunately, there is too much competition out there for Apollo Group now.
Nearly every 'traditional' school now offers some form of distance learning. Universities love it. They set up a camera in the back of a classroom, pay a Professor to teach the class while recording the lecture and now they can have a class of 100 instead of 20 without the infrastructure to support 80 more students.
This January, the company reported a 15% decline in student sign-ups - marking the third quarter in a row where enrollments fell.
Not to mention that Apollo Group said in late February that its accrediting body was considering placing the company's University of Phoenix subsidiary on probation because of alleged deficiencies involving its administrative structure and governance. If that happens, Apollo is going to be in much more trouble than it is today.
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