American Public Education, Inc. is a provider of exclusively online postsecondary education with emphasis on serving the needs of the military and public service communities. The company operates through two universities, American Military University, or AMU, and American Public University, or APU, which together constitute the American Public University System.

Summary of Video Content

The company was founded in 1991 under the name of American Military University by a retired Marine officer. At first, the university only offered graduate level programs specializing in military studies curriculum. By 1996, it began offering undergraduate programs but still primarily to military students. In 2002, the company went through a reorganization and began serving the general public. In November 2007, it went public.

One of the main competitive strengths that the company possesses is its affordable tuition which is one of the lowest in the industry. The reason why it can charge less than its peers is because of its exclusive online education model and lowest student acquisition costs.

The company’s business has a flexible cost basis and is scalable.

From 2007 to 2009, total revenues increased from $69.1 million to $149 million, which is a 116 percent increase, net income increased from $8.8 million to $23.9 million, which is a 172 percent increase, operating margins increased from 25.4 to 30.3 percent, and return on equity increased from 26.1 to 29.2 percent.

Currently, the for-profit education industry is under the government’s scrutiny. Any new regulation is likely to affect the company in a negative way. However, when you compared it to other for-profit education companies, American Public Education is in a little different situation because it does not rely heavily on Title IV loans.

The future growth is likely to come from the continual diversification of the student base away from the military to the general public.

The Strategy of Ben Graham – Warren Buffett’s Mentor

From 1923 to 1957 Warren Buffett’s mentor, Ben Graham, followed a strategy of investing in net-nets. He said: “It always seemed, and still seems ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the...net current assets alone…the results should be quite satisfactory. They were so in our experience, for more than 30 years.”
Today net-nets are rare. They are collected under GuruFocus’ Net-Net Screener. GuruFocus also publishes a monthly newsletter which recommends the safest net-nets. All of these are included in GuruFocus Premium Membership.

Click Here to Try It Free!

More Gurufocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool