Education & Training Stock Picks (LRN, ESI, DV, UTI, APOL)

We think so. Education & Training has been a huge laggard in 2012, much like the Homebuilders were in recent years. However, the "Homies" have been tearing it up in 2012 - and the Housing Market hasn't even fully recovered yet.

Here are our picks: K12, Inc. (LRN), ITT Educational Services Inc. (ESI), DeVry, Inc. (DV), Apollo Group Inc. (APOL), Universal Technical Institute, Inc. (UTI).

New regulations regarding for-profit schools and increased scrutiny have taken a toll on enrollment and revenue in the Education & Training industry.

In spite of that, fundamentally, these stocks are looking pretty good. You might get laughed out of a job interview if your degree is from the DeVry Institute, but DV did 2.09B in sales last year, and is expecting Brazil to drive its growth in the next year. DV is also on track with plans to cut costs companywide to save at least $50 million in fiscal 2013. Others in the sector are doing the same.

It may not be time to buy right this second, but it would behoove you to add these names to your radar. It's just a matter of time until we see a short squeeze as the sector recovers.