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Sally Jones
Sally Jones
Articles (580) 

Richard Blum Unloads 1.5M CECO Shares--March Madness or Sanity

March 24, 2013 | About:

In the last few years, Career Education Corp. (NASDAQ:CECO) has been hit hard by investigations, regulatory changes, and lawsuits. As the CECO stock price continues to decline from a February high of $5.04 to the current price of $2.60, investor Guru Richard Blum, Blum Capital Partners, reduced his CECO stake again by 0.23% on March 18, 2013. This is the fifth time Blum has reduced his position this month, unloading 1,525,794 shares since March 4, 2013, when he began making a string of reductions. After his latest CECO trade, Richard Blum holds current shares of 10,963,417. CECO’s current price is $2.60, with a 0% change from average.

Here's the CECO holding history of Investor Guru Richard Blum who achieved among the highest average return over 12 months in 2012, at 55.2%, according to the GuruFocus Score Board of Gurus.

If you delve into Career Education Corp.'s history, it condenses down into a high drama about grabbing pork. The background on part of the company's problems involves pressure from the U.S. GAO (Government Accountability Office) to uncover potential fraud in the For-Profit Education sector starting back in 2010. In August of that year, GAO launched an investigation designed to find out if organizations somehow pressured potential students or fudged their enrollment data or process to qualify them for federal student aid. GuruFocus reported:

"To conduct this investigation, GAO investigators posing as prospective students applied for admissions at 15 for-profit colleges in 6 states and Washington, D.C. The colleges were selected based on several factors, including those that the Department of Education reported received 89 percent or more of their revenue from federal student aid. "

In June 2011 the Department of Education released new regulations designed to prevent potential fraud in the For-Profit Education sector, putting Career Education Corp. and others in a transformational bind. Their numbers of new starts, i.e., new students, could be greatly influenced by the new regulations and closer monitoring.

Other investor Gurus, including Steve Cohen, Jeff Auxier, Joel Green Blatt, Chuck Royce, Paul Tudor Jones, have reduced or sold out their positions, starting last fall. Guru Jim Simons added to his CECO position by 25.23%, quarter ending Sept. 30, 2012. He holds 1,942,462 CECO shares bought at $2.69.

See a detailed analysis of CECO.

As of Dec. 31, 2012, Blum Capital Partners held 10 stocks with a total value of $6.2 billion. The company portfolio shows a large real estate sector of 48.5%.

Here’s the latest summary of Richard Blum’s top buys, top sales, and top holdings.

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 2.3/5 (6 votes)


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