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Adtalem Closes Sale of DeVry University & Carrington College

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Adtalem Global Education Inc. (ATGE - Free Report) completed the transfer of ownership of DeVry University (DVU) as well as its Keller Graduate School of Management to Cogswell Education LLC. The company also announced the completion of the transfer of ownership of Carrington College to San Joaquin Valley College.

DeVry University student starts have been decreasing for several years and are expected to pose threat in the near term as students are still reluctant to incur debt for higher degree. Nevertheless, Adtalem has undertaken several student-focused initiatives at DeVry University to return on the growth track and transform business. However, these efforts failed to reap the desired results.

With the transfer of Carrington and DeVry University, Adtalem will be able to pay better attention on remaining institutions across the medical and healthcare, technology and business as well as professional education segments.

The company said that, following divestitures the company’s U.S. postsecondary degree-granting institutions serve growing medical as well as healthcare markets. Also, Adtalem’s health care and international institutions have shown significant improvement in revenues and profitability since fiscal 2013. In particular, at the health care institution — Chamberlain — new student enrollment remained solid in the September 2018 session, up 9.5% from a year ago.

For fiscal 2019, Adtalem expects mid-single new student enrollment growth at Chamberlain. This university remains well positioned to benefit from growing demand for nurses and its significant role in the healthcare industry.

Price Performance

In a year’s time, the Zacks Rank #2 (Buy) company has gained 14.9% against the industry’s 15.9% decline. The outperformance can be primarily attributed to Adtalem’s better-than-expected earnings in eight of the trailing ten quarters. Moreover, the company believes that its portfolio management approach and effective cost management will help drive sustainability in revenues and EPS growth over the long term.

Other Key Picks

Some other top-ranked stocks that warrant a look in the same space include K12 Inc. (LRN - Free Report) , Bright Horizons Family Solutions Inc. (BFAM - Free Report) and Universal Technical Institute, Inc. . All these stocks carry a Zacks Rank #2. K12 sport a Zacks Rank #1 (Strong Buy), whereas Bright Horizons Family Solutions and Universal Technical Institute carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

K12 has reported better-than-expected earnings in three of the trailing four quarters, the  average beat being 37%.

Bright Horizons Family Solutions has an impressive long-term earnings growth rate of 12%.

Shares of Universal Technical Institute have gained 17% in the past three months.

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Bright Horizons Family Solutions Inc. (BFAM) - free report >>

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