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Some Notes on Strayer’s Cost Cutting Plans

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Strayer had their quarterly earnings announcement yesterday morning and there were a couple interesting announcements. Someone asked me for a comment on the report. I listened to the call this morning and here are some notes along with my basic comment in reply… Here are some notes: Enrollments for fall term 2013 decreased 17% to 43,192 (last year it was 51,727) Continuing student enrollment decreased 14% New student enrollment decreased 23% Revenues continue to fall—down 11% in Q3 2013 Earnings […]

Case Studies

Aeropostale (ARO) Might Offer Turnaround Value

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Sometimes in life you’re timing is great. Other times, it can be uncannily poor. But such is life, and such is investing. It keeps things very interesting and fun. Over the past week, I’ve been leisurely reading about teen retailers in general (AEO, ARO, ANF, and others) as the market has done a number on their stock prices over the past few months. I’ve focused in on Aeropostale (ARO), simply because it has been hit the hardest and I wanted […]

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Strayer Education (STRA): A Bright Spot in a Dark Industry

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Last week I bought Strayer Education (STRA). I think the stock is unduly cheap. The company has a market cap around $475 million, but has generated $71 million in free cash flow in the last 12 months (a 15% FCF yield). In the last six months alone, the company has generated $46.6 million of free cash flow. It’s a good business with high returns on capital, low fixed costs, high free cash flow yield, and even some growth potential that’s […]