If you’ve been following my blog you know that over the last two weeks I have been profiling all the companies in the education industry included in the Value Line Small to Mid-Cap Edition. These companies include American Public Education (APEI), Archipelago Learning (ARCL), Capella Education Company (CPLA), Bridgepoint Education (BPI), Franklin Covey Company (FC), Grand Canyon Education (LOPE), K12 Inc. (LRN), Lincoln Educational Services Corporation (LINC), Rosetta Stone (RST), Scientific Learning Corporation (SCIL), The Princeton Review (REVU), and Universal Technical Institute (UTI).
American Public Education (APEI)
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. To read more click here.
Archipelago Learning (ARCL)
Archipelago Learning is a subscription-based online education company that provides educational products to public and private schools. To read more click here.
Capella Education Company (CPLA)
Capella Education Company is an exclusive online postsecondary education services company. It provides various doctoral, master’s and bachelor’s degree programs in behavioral health and human services, business management and technology, and education and public service leadership through Capella University. To read more click here.
Bridgepoint Education (BPI)
Bridgepoint Education is a regionally accredited provider of postsecondary education services. It offers associate’s, bachelor’s, master’s and doctoral degree programs in business, education, psychology, social sciences and health sciences. To read more click here.
Franklin Covey Company (FC)
Franklin Covey Company is a consulting/educational company that provides execution, leadership, and personal effectiveness training. In other words, it helps its clients, individuals and organizations, to perform and execute at the highest level. Over the years, it provided its products and services to 97 of the Fortune 100 companies. To read more click here.
Grand Canyon Education (LOPE)
Grand Canyon Education is a regionally accredited for-profit education company that provides online postsecondary education as its primary service. It offers graduate and undergraduate degree programs in education, business, and healthcare. To read more click here.
K12 Inc. (LRN)
K12 Inc is a technology-based educational company. It offers curriculum and educational services to students in kindergarten through 12th grade. It mainly provides products and services to virtual public schools even though parents and traditional schools can purchase them. To read more click here.
Lincoln Educational Services Corporation (LINC)
Lincoln Educational Services Corporation is a provider of career-oriented postsecondary education to high school graduates and working adults. The goal of this education is to provide them with the skills necessary to get entry-level jobs in their chosen fields. To read more click here.
Rosetta Stone (RST)
I am willing to bet that once you hear the name Rosetta Stone, you automatically associate it with learning a foreign language. Rosetta Stone has done a tremendous job of marketing, and today, it is the most recognized brand of language learning products in the United States. The results are evident because since 2004, revenues have increased from $25.4 million to $252.3 million in 2009, which represents a tenfold increase.
The company uses a unique method known as Dynamic Immersion to teach adults new languages. This method is modeled after the way children learn, with no grammar or explanation but with practice and context. It uses images, text, and sound to teach vocabulary terms and grammar naturally. Rosetta Stone’s customers include individuals and institutions such as schools, government agencies and corporations. To read more click here.
Scientific Learning Corporation (SCIL)
Scientific Learning Corporation is the perfect example of a company that provides a pretty good product yet struggles with profitability. The company creates educational software that consists of exercises for the human brain. At first, you might think, “Exercising the brain – who in the world would need this?” What about students who struggle with learning or students who have a hard time staying focused? Schools that care about increasing the performance of their students are the perfect clients. To read more click here.
The Princeton Review (REVU)
If you have ever had to prepare for the SAT, ACT, LSAT or any other tests before being accepted to a postsecondary educational institution, you are most likely familiar with The Princeton Review because either you or someone you know had probably used the company’s test preparation materials. However, you may not realize that the company is more than just a test preparation provider because it operates through four divisions: Test Preparation Services, Supplemental Educational Services, Penn Foster, and National Labor College. To read more click here.
Universal Technical Institute (UTI)
Universal Technical Institute is a provider of postsecondary education that offers specialized technical education programs for students interested in careers as professional automotive, diesel, collision repair, motorcycle and marine technicians. To read more click here.
Which Ones are the Best?
The three companies that I like the best are American Public Education, Capella Education Company, and Bridgepoint Education. They are all in the for-profit post secondary education industry which has been hit pretty hard due to the uncertainties associated with the government involvement. However, they are in much better positions to deal with it than any other competitors. These three companies have the lowest loan default rates and therefore are the least likely to be affected by the new rules. In addition, American Public Education has the least reliance on Title IV out of all the companies I studied.
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Disclosure: The Author does not own any of the companies mentioned in this article.
About the author:
Mariusz SkoniecznyMariusz Skonieczny is the founder and president of Classic Value Investors, an investment management firm. He is also the editor of Ultimate Value Finder, a monthly newsletter that features three underfollowed, unknown, and undervalued companies ignored by Wall Street.