Bridgepoint Education Inc (BPI): Now Is the Time to Invest in Education

I noticed many of these companies just a few months ago and they were substantially cheaper. ITT Educational Services, Inc. (NYSE:ESI) was trading for $14.25 when I found it in January. Now it’s at $24.05. As ‘the dust settles’ these companies are going to keep appreciating. Some may not survive but those who do won’t be found anywhere near as cheap as they are now. If you find a company that you feel confident will survive the coming shakeout and think the present price presents a favorable risk-reward, then act now. That’s what investing is all about. We accept that the future is uncertain and seek optimal compensation for bearing that uncertainty. The risks of investing in for-profits will never be eliminated, but right now investing in them will be rewarded more than bearing the same risk in the near future. I advise you to do your own thorough research in picking a company. Look for low cohort default rates, accreditation security, new student start growth, low debt, lots of cash, and stabilizing free cash flow. I’ve looked at many for-profits and I can tell you that the opportunities are there, you just need to act on your convictions.

The article Now Is the Time to Invest in Education originally appeared on Fool.com and is written by Brian Grosso.

Brian Grosso has no position in any stocks mentioned. The Motley Fool recommends Bridgepoint Education. The Motley Fool owns shares of Bridgepoint Education. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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