Career Education (CECO) Skyrockets on European Asset Sale

Jacob Harper |

Following the planned asset sale of its European business, “storefront academy” Career Education Corp. (CECO) saw its shares rise over fifty percent on Oct. 25.

The Schaumberg, IL-based for-profit education center is divesting from its operations in Paris and Monaco, selling their locations there to equity firm Apex Partners for $350 million. The deal is expected to close by the end of 2013.



Career Education has struggled along with the rest of the for-profit educational sector. This downturn can most likely be attributed to increased competition from traditional non-profit schooling, and as the Wall Street Journal put it, a “growing skepticism about the value of high-cost education.” Rival Apollo Group Inc. (APOL) , considered a bellwether in for-profit education, has likewise been suffering mightily, closing half its brick-and-mortar locations in 2012, as enrollment dwindles and storefronts are closed to cut costs.

Despite the precipitous drop-off in the for-profit sector, Wells Fargo (WFC) upgraded Career Education on the expected cash infusio, raising their rating from market perform to outperform. In the report, analyst Wells Fargo analyst Trace Urdan wrote, “With the expected cash infusion, we now believe (Career Education’s) shares are worth $5-7 (up from $2.50-4.80) based on our sum of the parts analysis, for a potential mean return of 60% against our current expectations.”

Career Education spiked 53.16 percent In early trading to hit $5.82 a share.

 

(image courtesy of Flickr)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
APOL Apollo Education Group Inc. n/a n/a n/a 0 Trade
CECO Career Education Corporation 8.56 -0.08 -0.93 262,324 Trade
WFC Wells Fargo & Company 51.68 -0.12 -0.23 17,130,641 Trade
ARRAF Arria Nlg Plc Ord 0.27 0.00 0.00 0

Comments

Emerging Growth

Inception Mining Inc

Inception Mining Inc a mining exploration stage company engaged in the acquisition, exploration, and development of mineral properties, for gold from owned mining properties.

Private Markets

CF0005, LLC dba Mesa-Marshall #1-2

MESA Resources, Inc. ("MESA") is sponsoring the development of the oil & gas well completion project "Mesa-Marshall #1-2". MESA, founded in 1992, is engaged in the acquisition, exploration and development…

Voleo

Voleo is a free download that allows you to form investment clubs with your friends, family, colleagues, classmates, teammates…basically anyone you know and trust. Invest and manage a stock portfolio…