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Also traded in: Germany, Mexico

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength

GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth

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» APOL's 30-Y Financials

Financials (Next Earnings Date: 2017-10-20 Est.)

Revenue & Net Income
Cash & Debt
Operating Cash Flow & Free Cash Flow
Operating Cash Flow & Net Income

» Details

Guru Trades

Q2 2016

APOL Guru Trades in Q2 2016

Mario Gabelli 66,450 sh (+90.13%)
Yacktman Fund 1,875,000 sh (unchged)
Joel Greenblatt Sold Out
Jim Simons Sold Out
Donald Yacktman 2,120,584 sh (-0.02%)
Barrow, Hanley, Mewhinney & Strauss 155,488 sh (-0.27%)
Jeff Auxier 153,650 sh (-5.05%)
Jeremy Grantham 81,612 sh (-18.22%)
FPA Capital Fund 2,436,067 sh (-32.18%)
First Pacific Advisors 4,692,581 sh (-36.60%)
» More
Q3 2016

APOL Guru Trades in Q3 2016

Joel Greenblatt 11,837 sh (New)
Mario Gabelli 68,230 sh (+2.68%)
Yacktman Fund 1,875,000 sh (unchged)
Jeremy Grantham Sold Out
Donald Yacktman 2,118,054 sh (-0.12%)
Jeff Auxier 143,900 sh (-6.35%)
Barrow, Hanley, Mewhinney & Strauss 145,019 sh (-6.73%)
FPA Capital Fund 1,598,004 sh (-34.40%)
First Pacific Advisors 3,016,689 sh (-35.71%)
» More
Q4 2016

APOL Guru Trades in Q4 2016

Joel Greenblatt 67,432 sh (+469.67%)
Yacktman Fund 1,875,000 sh (unchged)
Barrow, Hanley, Mewhinney & Strauss 145,019 sh (unchged)
Donald Yacktman 2,105,904 sh (-0.57%)
Jeff Auxier 107,521 sh (-25.28%)
Mario Gabelli 23,390 sh (-65.72%)
First Pacific Advisors 840,714 sh (-72.13%)
FPA Capital Fund 281,704 sh (-82.37%)
» More
Q1 2017

APOL Guru Trades in Q1 2017

Barrow, Hanley, Mewhinney & Strauss Sold Out
Jeff Auxier Sold Out
Donald Yacktman Sold Out
FPA Capital Fund Sold Out
Mario Gabelli Sold Out
Joel Greenblatt Sold Out
First Pacific Advisors Sold Out
Yacktman Fund Sold Out
» More
» Details

Insider Trades

Latest Guru Trades with APOL

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Joel Greenblatt 2017-03-31 Sold Out 0.01%$9.92 - $10 $ 10.000%0
Barrow, Hanley, Mewhinney & Strauss 2017-03-31 Sold Out $9.92 - $10 $ 10.000%0
Mario Gabelli 2017-03-31 Sold Out $9.92 - $10 $ 10.000%0
Donald Yacktman 2017-03-31 Sold Out 0.19%$9.92 - $10 $ 10.000%0
Yacktman Fund 2017-03-31 Sold Out 0.28%$9.92 - $10 $ 10.000%0
FPA Capital Fund 2017-03-31 Sold Out 0.53%$9.92 - $10 $ 10.000%0
Donald Yacktman 2016-12-31 Reduce -0.57%$7.95 - $9.94 $ 10.0010%2,105,904
FPA Capital Fund 2016-12-31 Reduce -82.37%1.93%$7.95 - $9.94 $ 10.0010%281,704
Joel Greenblatt 2016-12-31 Add 469.67%0.01%$7.95 - $9.94 $ 10.0010%67,432
Mario Gabelli 2016-12-31 Reduce -65.72%$7.95 - $9.94 $ 10.0010%23,390
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Business Description

Industry: Education » Education & Training Services    NAICS: 611310    SIC: 8221
Traded in other countries:APO.Germany, APOL.Mexico,
Headquarter Location:USA
Apollo Education Group Inc is a private education service provider. It offers undergraduate, graduate, professional development & other non-degree educational programs and services.

Apollo Education Group Inc was incorporated in Arizona in 1981. It offers educational programs and services, online and on-campus at the undergraduate, master's and doctoral levels. Its learning platforms include the following The University of Phoenix, Inc., Apollo Global, Inc. which also includes BPP Holdings Limited, Universidad Latinoamericana, Universidad de Artes, Ciencias y Comunicación, and Indian Education Services Private Ltd., Western International University, Inc., Institute for Professional Development, The College for Financial Planning Institutes Corporation, Carnegie Learning, Inc., and Apollo Lightspeed. Its institutions offer Accredited Degree Programs, Professional Examinations Training and Professional Development, and Employers. The Company's international operations include full-time and part-time courses, delivered on-campus or online, for professional examination preparation, professional development training and various degree/certificate/diploma programs. It competes mainly with traditional public and private two-year and four-year degree-granting regionally accredited colleges and universities, other proprietary degree-granting regionally accredited schools and alternatives to higher education. Its domestic postsecondary institutions are subject to extensive federal and state regulations.

Guru Investment Theses on Apollo Education Group Inc

FPA Capital Comments on Apollo Education - Jan 30, 2017

The largest stock reduction in terms of weighting percentage was Apollo Education (NASDAQ:APOL), which we reduced by over 80%. The reason is that APOL appreciated nearly 25% and approached the buyout price the board and shareholders agreed to earlier in the year. The Department of Education finally approved the acquisition of APOL by a private equity group with just a couple of conditions.

From FPA Capital's fourth quarter 2016 commentary.

Check out FPA Capital Fund latest stock trades

FPA Capital Fund Comments on Apollo Education Group - Feb 09, 2016

APOL (NASDAQ:APOL) is trading at less than book value, less than 10% of sales (net of cash), and less than 1x enterprise value-to-EBITDA. APOL is a very cheap stock, in our opinion, and we added to the position in the quarter.

Let’s discuss APOL in greater detail. APOL declined 28% in the December quarter due to reporting lower than expected new student enrollment and a non-fundamental issue. The most important items, profits and free cash flow, met expectations. Incredible as it is irresponsible, the stock partly sold off because the Chairman of the Board received a margin call on stock he had pledged as collateral for a real estate loan he assumed many years ago. Per our discussion with APOL management, the loan was for a little over $25 million and it had a condition that provided that the loan would come due immediately if APOL declined below $10 a share. This occurred on October 22, when APOL announced its earnings, lower new student enrollments, and a $110 million acquisition in Germany. Shareholders initially sold off the stock a couple of dollars and pushed the stock just below $10. Unfortunately, the Chairman did not have the proceeds immediately available that day to pay off the loan, and the margin clerk proceeded to indiscriminately sell approximately three million of the Chairman’s shares, pushing the stock down to close to $7.

Not only do we find this behavior financially irresponsible but also inconsistent with the prudent stewardship of a publicly-traded company. Subsequently, we wrote a letter to the management team and board, and had a lengthy phone call with the company’s lead- independent board member expressing our views. In summary, we suggested that the company buy back all of the remaining Chairman’s stock and eliminate the dual-class shareholder arrangement. APOL has historically generated excellent returns on capital and has some good opportunities once it completes its repositioning of the University of Phoenix (UoP). Its global business is growing very fast, its global profit margins are expanding, and the global business is expected to generate material operating cash flow this year and in the future. The stock is incredibly cheap by our metrics, at roughly 1x enterprise value-to-EBITDA, but investors are unsure of the repositioning strategy at the UoP and concerned about the heightened regulatory environment.

However, thus far, APOL has largely avoided any material penalties from the numerous investigations that seemingly never end in the for-profit education industry. For example, on January 15, 2016, the Department of Defense (DoD) removed the UoP from probationary status after a three-month review of UoP’s business practices with respect to Tuition Assistance (TA) grants. Anti-for-profit education activists last year made a number of claims about UoP and its enrollment of military personnel in its school. There were concerns that active and former military personnel would never again receive financial aid to attend UoP and APOL would have to pay a massive fine. The bottom line is that the DoD conducted a thorough investigation and within three months removed the TA probation, and APOL was not fined a penny.

Reviewing UoP’s operations, we agree with Tim Slottow, the current President of UoP and the former CFO at the University of Michigan, and his strategy and vision for UoP. President Slottow’s vision is to attract highly qualified adult students to UoP’s Baccalaureate programs and provide them an excellent education in a very efficient system that will allow these students to continue to move their careers up the corporate ladder or healthcare employment track. Retention and graduation rates are among the most significant factors President Slottow is focused on, as well as job placement for students with the hundreds of businesses that recruit from UoP.

Going forward, UoP will require prospective students to take diagnostic tests to determine their capability to complete their degree, rather than having essentially an open-enrollment policy. In the short term this means fewer students will enroll in UoP, but in the long run it is likely more students will persist all the way through to graduation. The objective is to graduate more students who are less likely to drop out and not be able to pay off their student loans.

Subsequent to year-end 2015, on January 11, APOL’s Board of Directors issued a press release indicating that the board hired two investment banks and a law firm to evaluate strategic alternatives for the company. Later that day, the Dow Jones newswire service reported that the private equity firm Apollo Global Management was rumored to have offered over $1 billion to acquire APOL.

We immediately penned another letter to APOL’s board and detailed our assessment of what APOL’s shares are worth. We are concerned that Apollo Global Management is going to offer a reasonable premium above the January 11th, 2015 closing price, but enormously below the intrinsic value of the business, and the board will capitulate and sell the company at the bottom of the cycle. If the board agrees to sell the entire company at what some of the rumors are suggesting -- $1 billion -- that would value the business at less than 2x trailing twelve-months EBITDA -- after considering the net $6 per share of cash on the balance sheet. To put that into perspective, based on Apollo Global Management’s 2015 presentation, LBO takeover EBITDA multiples averaged 9.3x over the past decade, and the lowest average multiple was 8x in 2009 during the financial crisis period.

The $1 billion valuation for APOL would be unquestionably rejected by us, and we hope every other shareholder would reject it. Furthermore, that valuation would give absolutely no consideration for APOL’s rapidly growing international business, nor the large profit improvement opportunity for UoP. Green shoots are now sprouting at UoP, with retention rates starting to turn positive and student enrollment potentially bottoming this quarter. We will update you later should any materially new information be announced with respect to APOL’s strategic review, but below we provide our estimate of what APOL is worth.

From FPA Capital Fund (Trades, Portfolio)'s fourth quarter 2015 commentary.

Check out FPA Capital Fund latest stock trades

Yacktman Fund Comments on Apollo - Feb 05, 2016

Apollo (NASDAQ:APOL) continues to face challenging business and regulatory environments. The company has a strong balance sheet and early in 2016 announced it was exploring strategic alternatives that could lead to a change of control.

From the Yacktman Fund (Trades, Portfolio) fourth quarter 2015 commentary.

Check out Donald Yacktman latest stock trades

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FPA Capital Comments on Apollo Education Guru stock highlight
The largest stock reduction in terms of weighting percentage was Apollo Education (NASDAQ:APOL), which we reduced by over 80%. The reason is that APOL appreciated nearly 25% and approached the buyout price the board and shareholders agreed to earlier in the year. The Department of Education finally approved the acquisition of APOL by a private equity group with just a couple of conditions. Read more...



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More Statistics

Revenue (TTM) (Mil) $2,000.33
EPS (TTM) $ -0.19
Short Percentage of Float1.42%
52-Week Range $6.75 - 10.00
Shares Outstanding (Mil)109.86

Piotroski F-Score Details

Piotroski F-Score: ----
Positive ROAN
Positive CFROAN
Higher ROA yoyN
Lower Leverage yoyN
Higher Current Ratio yoyN
Less Shares Outstanding yoyN
Higher Gross Margin yoyN
Higher Asset Turnover yoyN

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