What Stock Not to Buy: Apollo Group
Apollo Education Group, Inc. (APOL) got thrown off the truck today at 70 mph. Then a fleet of dump trucks ran over it. That's right, APOL was one off the worst stocks to own today.
Absolute garbage. The writting has been on the wall about how terrible this company is, we are glad they got killed today. Poetic justice. Apollo shares fell 28% today. University of Phoenix has juked veterans, minorities, and just about everyone else they can take advantage of with rip-off degress. Their clients are the humble people of America that need the break in the first place. Instead they get a useless expensive piece of paper that doesn't help them get ahead in life.
Apollo reported a 10 cents loss per share on $578.6 million in revenue compared to Thomson Reuters consensus estimates of a net loss per share of $0.16 on $584.61 million in revenue. Finally people are waking up and avoiding this company because enrollment is way down. In Q2 2015 University of Phoenix New Degreed Enrollment was 28,300 and Degreed Enrollment was 213,800. Overall New Degreed enrollment dropped 12.9% compared to the same quarter in the previous year, and Degreed enrollment dropped 14.6% at the same time.
Think we are full of it? Think again in 2009 the University of Phoenix lawsuit filied six years ago by two ex-admissions staffers has been settled for $78.5 million—in what lawyers say is one of the largest pay for performance compensation settlements ever reached.
The University of Phoenix university's parent company, The Apollo Group, agreed to pay $67.5 million to the federal government for the UOP fraud and $11 million in attorney's fees and costs for the plaintiffs. In doing so, The Apollo Group did not admit any wrongdoing for the bonus compensation, and executives for the University of Phoenix university said they did not expect any prosecution from the Department of Education in addition to the University of Phoenix lawsuit charges.
The University of Phoenix lawsuit by former admissions counselors Mary Hendow and Julie Albertson charged the for-profit online university with paying recruiters bonus compensation and other pay for performance compensation (including DVD players and spa trips) based on the number of students they enrolled, which is illegal for schools receiving federal student aid money. The school denied the bonus compensation allegations.
"The settlement is a huge victory for taxpayers and the federal government," announced Robert J. Nelson, lead attorney for the UOP fraud case plaintiffs. "This settlement sends a clear message to the for-profit education industry [that] compliance with the Higher Education Act's incentive compensation ban must be achieved." (source: GetEducated.com)
Stay away from APOL shares. They deserve what they got today.
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