Apollo (APOL)

[Cafemonkey]

Hello all,

I'm new to Rule 1, so forgive my lack of numbers...

But I was looking at Yahoo Financial, and noticed that several good companies took a big hit today:

http://biz.yahoo.com/ap/060612/monst...ions.html?.v=8

Now, normally that wouldn't concern me, but one of the mentioned companies is the Apollo Group. This was mentioned by Phil as one of his personal choices.

With this big of a drop, might it be a good buy?

[Cafemonkey]

Oh, nevermind... Apollo is actually up today!

I guess Monster doesn't pass the test, because it appears that the CEO is messing with the books to increase his compensation. Not exactly "owner" mentality.

Any thoughts on Michaels Stores (MIK)?

[timorr]

has anyone ran the current numbers for apol? Thanks , Tim

[Justin]

I havne't seen it yet. Why dont you be the first to run apollo and share your results?

[patfergie44]

Hey Tim,

I haven't done any research on the company so don't have much idea on Meaning or Moat. The numbers are as follows:

Growth Rate: if you forget about the last three years (3rd year is 0, last year is a minus 26%), we can use the analyists 16% growth rate.

Current EPS is 2.54
Current PE is 18
Historical and Average PE's are 71 and 41 respectively. However, I would only go 2 times the 16% which would then be 32.

Given that, the MOS would be $44.32 with a current price of $47.25. Just looking at the numbers, I would be concerned as to why the recent growth rate is going down.

[ingo]

Hi all,

I've some questions/ ideas we could discuss:
1. Is Apollo's loss a buy signal?
2. If not, is it smart not to diversify as Phil Town suggests! Do we know that our "rule1" stock is no Enron or Worldcom?
3. Is it a problem only Apollo has or are all "educational" stocks affected?

Thanks for a lot of answers (I hope)

Ingo :wink:

[steve44]

Wow. Apol certainly had a gap down. I hope you were not long in that stock.

1. No.. The Apollo loss or gap down is not a buy signal from anything I have read in the last year. For me ,it is a sign of a volitile stock which have burnt me in the past. I stay away from stock with recent history of "gapping". Those are what Phil calls "risky business" stocks.

2. I don't understand the question.

3. If you check any web site for institutional money flow, there is no money going into this group now. Investools is showing a big fat zero as far as money flow into this "Schools" industry sector. That is reason enough to stay away from a stock like this.

Hope that helps.

Steve

[allen]

Apollo has been losing equity per share for the past 3 years anyway, making it unsuitable (in my eyes) as a R1 stock.

In this industry, I've had CECO on my watch list (though equity growth is slowing here, as well). Much better numbers, and I like their "moat" of "name-brand" institutions (i.e. Le Cordon Bleu schools).

[ingo]

Hi steve44,

with my question number two I wanted to say, that Phil Town says you should buy only a small number of different stocks. Imagine you would have 4 different stocks and one of them would drop about 13 percent like apol. Or you can check on the management and think all is ok, but in reality they cheated in their accounting. In such a case I would feel better to own severeal ( a higher number of )different stocks and to have only a small amount of money in such a company.
And thanks for your reply!

[ingo]

Hi allen,

I prefer ceco too. But I fear those negative earnings report of apol will pull down ceco too. Maybe they will have lower earnings too. As far as I know we'll see on November, 7th.