Corinthian: Collins Invests in College

09/11/2002 12:00 am EST


Jim Collins

Chairman and CEO, Insight Capital Research & Management, Inc.

For the 15-year period ending 7/31/02, The Hulbert Financial Digest ranks Jim Collins’ OTC Insight as the #1 performing newsletter.  Among his latest featured stocks is this operator of colleges.

Corinthian Colleges (COCO OTC) is one of the largest private, for-profit, post-secondary education companies in the US, focusing on career-oriented curricula. Nearly 26,000 students are enrolled in the institutions. In late August, the company raised its guidance for fiscal 2003. The company expects to sustain revenue growth over the next several years in the 20% to 25% range. It believes revenues for fiscal 2003 will grow between 35% and 40%. Based on current trends, the company expects earnings to be between $1.12 and $1.18 per share for fiscal 2003. We note that per share results are restated to reflect a 2-for-1 stock split in May 2002.

Technically, since a big dip in price in mid-July, the stock has been moving on a steady uptrend. The stock hit a new 52-week high recently. The stock shows a relative strength reading of  98 (out of 100). We caution that the company competes in a highly fragmented environment. However, the company believes that the growing demand for skilled labor, positive demographic trends, the economic value of post-secondary education to students, and budgetary constraints at public colleges will broaden the market for its services over the next decade.”

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