Back to top

Bear of the Day

Corinthian Colleges (COCO - Snapshot Report) is coming off a large negative earnings surprise and is a Zacks #4 Rank (Sell).

Company Description

Corinthian Colleges operates as a post-secondary education company. It offers various diploma programs, as well as associate's, bachelor's, and master's degrees. As of June 30, 2012, it operated 100 schools in 26 states of the United States and 16 schools in the province of Ontario, Canada with a total of 91,460 student enrollments under the Everest, WyoTech, and Heald brand names. The company was founded in 1995 and is based in Santa Ana, California.

COCO Big Miss

The most recent quarter saw the company miss the Zacks Consensus Estimate by a large amount. The company reported earnings of $0.05 per share while the consensus estimate was calling for $0.07. That translates to a $0.02 miss or 28.5%. The stock fell 8% in the session following the release.

Landscape Shifting

The for profit education sector has seen a large shift in the landscape. More traditional college like Stanford and The Ohio State University have begun offering courses online and in many cases for free. This has resulted in significant pressure on new enrollment numbers for all the companies in this sector.

COCO Sees Estimates Moving Lower

Estimates for COCO have been sinking of late. The Zacks Consensus Estimate for 2012 for AM stood at $0.39 as of May 2012. The consensus has since moved lower to $0.23. Over the same time period estimates for 2013 have moved from $0.52 to $0.33.

Valuation

The valuation metrics for COCO are low, but don't think there is a lot of value in this stock. The trailing PE of 6.5x is less than half the 14x industry average, while the forward PE of 10x has the company trading much closer to the industry average of 13x. Price to book of 0.3x is well below the 2x industry average and price to sale is also quite low at 0.1x compared to 2x industry average.

The Chart

The price and consensus chart shows how the stock has been sliding for the last several years. The trend of earnings starting off high in the new year and sinking lower is apparent in the movement of the colored lines. The stock is a Zacks Rank #4 (Sell)

Corinthian Colleges - ticker COCO>
 
<P ALIGN=

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Home Run Investor service, a Buy and Hold service where he recommends the stocks in the portfolio

Brian is also the editor of Follow The Money Trader a trading service that tracks institutional money flows and looks for great stock picks from that data.

Follow Brian Bolan on twitter at @BBolan1

Like Brian Bolan on Facebook

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%