If anyone has proved that education is recession proof, it's Apollo Group.
The Phoenix, Ariz.-based education company's revenue grew 26.5% over the past year thanks to its flagship University of Phoenix. Degree enrollment at U of P rose 18.4% year-over-year to 455,600, as many people decided to go back to school to improve their skills during this downturn.
The company's earnings grew 33% in its first fiscal quarter of 2010, and analysts are predicting 24% growth for the year. Couple this with low debt and favorable trends supporting the education sector, and you've got a stock match made in heaven.
What's more, an average sticker price of $12,000 a year for Apollo's undergraduate degrees, compared to a national average of $26,000 a year for 4-year private schools, makes Apollo a more affordable option for students.
Jerry Herman, a research analyst for Stifel Nicolaus, said this means Apollo should be "capable of growing at a reasonably predictive rate." And with the stock trading at less than 12 times earnings estimates, you don't need a Ph.D to know it's a bargain. "If investors are looking for growth at reasonable prices, Apollo offers this," Herman said.
--Chavon Sutton
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