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Adtalem Global Hits a 52-Week High: Can It Scale Higher?
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On Dec 12, shares of Adtalem Global Education Inc. (ATGE - Free Report) rallied to a 52-week high of $45.20. The stock pulled back to end the trading session at $45.15. The stock has a market cap of $2.69 billion. Average volume of shares traded over the last three months was approximately 5.66 million.
The for-profit education company has seen its shares rise roughly 21% in the last six months, compared with a 9.6% increase of the Zacks Schools Industry. The company has also outperformed the industry in each of the 4-week, 12-week and 52-week time frames.
The company’s cost-saving initiatives, transformation strategy and continued focus on stackable programs bode well.
Will the Rally Continue?
Adtalem Global’s cost-saving initiatives like workforce reduction and cutting down on discretionary spending are encouraging. Total operating cost and expenses contracted 2.44% year over year in first-quarter fiscal 2018. In second-quarter fiscal 2018, Adtalem Global intends to reduce operating expenses by 1-2% year over year.
The company is making progress with new programs, which are more directly aimed at meeting student preference and employer needs. These programs are shorter and more stackable, spanning the fields of technology, healthcare and business fields. They have been designed to provide students with enhanced flexibility and greater affordability to support their pursuit of in-demand skill-sets. Such new programs can facilitate enrollment and drive growth.
In order to enhance academic excellence, Adtalem Global is emphasizing on partnering with corporations, hospitals, government agencies and professional organizations. This will give the company the option to reduce its exposure to Title IV funding. In fact, the company has made steady progress in reducing its exposure to Title IV funding. The company has met its goal of limiting federal funding revenues to 85% by the end of fiscal 2017.
Adtalem Global will continue to focus on growing organic revenue, driving operating income and EPS to unlock shareholders’ value. This transition to active portfolio management will continue in fiscal 2018 and beyond, as it focuses on improving return on invested capital.
Recently, the company transferred ownership of DeVry University to Cogswell Education to focus more on the rest of its institutions in the medical and healthcare, technology and business, and professional education segments. The elimination of DeVry University is expected to prove favorable as it has been seeing declining enrollments for a long time.
Zacks Rank & Stocks to Consider
Adtalem Global presently carries a Zacks Rank #3 (Hold).
Acushnet Holdings’ 2017 earnings are expected to rise 76.7% year over year.
Malibu Boats is expected to witness 26.7% growth in fiscal 2018 earnings.
Black Diamond is likely to see more than 200% rise in 2017 earnings.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Adtalem Global Hits a 52-Week High: Can It Scale Higher?
On Dec 12, shares of Adtalem Global Education Inc. (ATGE - Free Report) rallied to a 52-week high of $45.20. The stock pulled back to end the trading session at $45.15. The stock has a market cap of $2.69 billion. Average volume of shares traded over the last three months was approximately 5.66 million.
The for-profit education company has seen its shares rise roughly 21% in the last six months, compared with a 9.6% increase of the Zacks Schools Industry. The company has also outperformed the industry in each of the 4-week, 12-week and 52-week time frames.
The company’s cost-saving initiatives, transformation strategy and continued focus on stackable programs bode well.
Will the Rally Continue?
Adtalem Global’s cost-saving initiatives like workforce reduction and cutting down on discretionary spending are encouraging. Total operating cost and expenses contracted 2.44% year over year in first-quarter fiscal 2018. In second-quarter fiscal 2018, Adtalem Global intends to reduce operating expenses by 1-2% year over year.
The company is making progress with new programs, which are more directly aimed at meeting student preference and employer needs. These programs are shorter and more stackable, spanning the fields of technology, healthcare and business fields. They have been designed to provide students with enhanced flexibility and greater affordability to support their pursuit of in-demand skill-sets. Such new programs can facilitate enrollment and drive growth.
In order to enhance academic excellence, Adtalem Global is emphasizing on partnering with corporations, hospitals, government agencies and professional organizations. This will give the company the option to reduce its exposure to Title IV funding. In fact, the company has made steady progress in reducing its exposure to Title IV funding. The company has met its goal of limiting federal funding revenues to 85% by the end of fiscal 2017.
Adtalem Global will continue to focus on growing organic revenue, driving operating income and EPS to unlock shareholders’ value. This transition to active portfolio management will continue in fiscal 2018 and beyond, as it focuses on improving return on invested capital.
Recently, the company transferred ownership of DeVry University to Cogswell Education to focus more on the rest of its institutions in the medical and healthcare, technology and business, and professional education segments. The elimination of DeVry University is expected to prove favorable as it has been seeing declining enrollments for a long time.
Zacks Rank & Stocks to Consider
Adtalem Global presently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the sector are Malibu Boats, Inc. (MBUU - Free Report) , Acushnet Holdings Corp. (GOLF - Free Report) and Black Diamond, Inc. (CLAR - Free Report) .
All these companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Acushnet Holdings’ 2017 earnings are expected to rise 76.7% year over year.
Malibu Boats is expected to witness 26.7% growth in fiscal 2018 earnings.
Black Diamond is likely to see more than 200% rise in 2017 earnings.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>