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Re Corinthian Colleges - The Case for Growth
Posted by: swnyc2 (IP Logged)
Date: June 11, 2013 10:38PM

I hope you're right.
The SEC can seek monetary penalties and return of illegal profits.
It's hard to know what this will amount to, but it will likely be less than the $20+ million market cap loss today.



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Re Corinthian Colleges - The Case for Growth
Posted by: blainehodder (IP Logged)
Date: July 26, 2013 12:45PM


Batbeer,

What is your take on Panetta resigning? Foreshadowing a loss on the 2011 metrics/ LOC raise? more trouble down the pipe? Or just a busy guy for a 75 year old blue hair as stated?

http://online.wsj.com/article/BT-CO-20130722-710782.html?mod=s_wsj




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Re Corinthian Colleges - The Case for Growth
Posted by: batbeer2 (IP Logged)
Date: July 26, 2013 01:47PM

Hi Blainehodder.

I do not like the news of Panetta resigning.

At best it is poor judgement on his part to take the job and then resign so quickly. If COCO gets a guy like that on the board, that means its poor judgement on their part.

At worst, Panetta is the famous rat leaving the ship.

It seems there is no end to the stream of bad news for COCO. This is getting tedious.

Having said that, I'm still hanging in there. I stand by the thesis:

1) There is no other for-profit I know of that you can buy for $2000 per student. Meanwhile, fees at state-funded colleges are still rising at double-digit rates even as capacity is being reduced. Especially in California. In the end that is what drives the economics of COCO. I'm amazed that these schools are turning away students while still sponsoring their basketball teams.

2) The regulators have been all over COCO for years. There is not much they are going to find now. There may be some fines and/or restatements but I think the current numbers are as clean as any you'll ever see by any company.

3) The ED is still the single most important risk and the fact that they have not made their move yet reinforces my belief that they are not going to shut down COCO.

This reminds me of Biovail, another troubled Ruane Cunniff stock. From '04 to '10, nothing but bad news. I owned it for a while. I sold too soon. Biovail is now known as Valeant pharmaceuticals.



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Re Corinthian Colleges - The Case for Growth
Posted by: swnyc2 (IP Logged)
Date: July 26, 2013 09:59PM

Batbeer2,

I can't imagine Panetta being "too busy."
The 2 most likely reasons he left are:
1. He learned unsavory things about COCO that made him want distance himself from it to protect his reputation.
2. He learned things that made him believe that COCO would fail financially, and so he would not profit from being on the board (rat leaving the sinking ship).

I favor possibility #1, although I cannot eliminate possibility #2.
As a result I am hanging on to my COCO shares, but I will not add more.
Instead, I opened a position in APOL. It may not be the home run that COCO is, but it is still a substantially undervalued stock that fits the same thesis.
The reward may be lower than with COCO, but the risk is also lower as well....




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Re Corinthian Colleges - The Case for Growth
Posted by: batbeer2 (IP Logged)
Date: July 27, 2013 01:06AM

Yeah...

I believe he was brought on for his political influence. Maybe he has developed some political interests/ambitions that do not mix well with his role at COCO. Not a matter of time but a matter of conflict of interest.

That would be the third possibility.

I'm not ruling out yours but I think this is most likely. If that's what's going on, what he has stated would not be untrue..... which is precisely the kind of lie one would expect from a politician.



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Re Corinthian Colleges - The Case for Growth
Posted by: batbeer2 (IP Logged)
Date: August 20, 2013 08:59AM

BINGO

>> On August 16, 2013, Corinthian Colleges, Inc. (the “Company,” “Corinthian,” “we,” “us” or other similar terms) received a letter from the U.S. Department of Education (“ED”) regarding its review of the Company’s composite score for the fiscal years ended June 30, 2011 and June 30, 2012 (the “ED Letter”).

The ED letter states that ED has determined the Company’s composite scores for fiscal 2011 and fiscal 2012 to be 0.9 and 1.5, respectively, and that the Company will not be required to post a letter of credit.


IMO the worst single risk for the company is now removed.



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Re Corinthian Colleges - The Case for Growth
Posted by: batbeer2 (IP Logged)
Date: August 25, 2013 05:12AM

A couple of articles about COCO worth reading at SA.

I think it's neither a five-bagger nor a value trap.



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Re Corinthian Colleges - The Case for Growth
Posted by: swnyc2 (IP Logged)
Date: August 26, 2013 06:23PM

Dear Batbeer2,

Thanks for the articles.

I am confuse though about your last comment about COCO not being a 5-bagger.
Have you had a change of heart?



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Re Corinthian Colleges - The Case for Growth
Posted by: batbeer2 (IP Logged)
Date: August 27, 2013 01:01AM

Hi Swnyc2,

No.

The article I linked to is headed "five-bagger or value trap". I think COCO is neither.
I don't think it's anything in between either. IF I'm right it's a 10 bagger.

@ $15 COCO would be trading just under 1x sales. That's in-line with some other for-profits.
The rest will have to come from growth.

It's now very clear the competition (state-funded colleges) in California are in dire straits.

10-k will be out this week.

kind regards,
F



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Re Corinthian Colleges - The Case for Growth
Posted by: vgm (IP Logged)
Date: August 27, 2013 03:33AM

Hi Batbeer,

Thanks for the great writeup.

In the second of those articles you mentioned, the author has gone for COCO - hook line and sinker - after confessing to not being sure in the first article. Seems extreme:

"After considering what is publicly known now and the likelihood and consequences of various potential events in the future, I decided to liquidate my existing positions and put my entire portfolio into Corinthian stock."

[seekingalpha.com]



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