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Apollo Group, Inc. (APOL)

David Fried’s The Buyback Letter is one of only nine letters on The Hulbert Financial Digest’s 2012 Honor Roll. To make it on to the Honor Roll, newsletters must deliver above-average performance in both up and down markets. As Mark Hulbert writes, the Honor Roll is designed to be “a list of letters that you...

David Fried’s The Buyback Letter is one of only nine letters on The Hulbert Financial Digest’s 2012 Honor Roll. To make it on to the Honor Roll, newsletters must deliver above-average performance in both up and down markets. As Mark Hulbert writes, the Honor Roll is designed to be “a list of letters that you likely will be able to live with through both thick and thin.” And, he adds, Honor Roll inductees perform better over the next year, on average, than other letters. With that, here’s a buy recommendation from the latest The Buyback Letter:

Apollo Group, Inc. (APOL) is the biggest U.S. for-profit college company (University of Phoenix), and provides higher education programs for working adults. It has both online and on-campus programs at the undergrad, masters and doctoral levels in 41 states, Puerto Rico, Latin America and Europe, and has been in the education business for more than 35 years.

“The company posted fiscal second-quarter profit and sales that topped analysts’ estimates as more new students signed up for classes. Net income rose to $63.9 million (51 cents a share), in the three months ended Feb. 29, from a loss of $64 million, or 45 cents, a year earlier. Profit excluding some items was 58 cents a share, exceeding the 37-cent average of estimates compiled by Bloomberg.

“Apollo’s results suggest its efforts to screen out students who are unlikely to be successful may have started to pay off, said one analyst. It seems that fewer students are leaving, showing higher rates of ‘persistence.’

“Management has reduced shares outstanding by 11.6% in the last 12 months. … Buy.”

- David R. Fried, The Buyback Letter, April 20, 2012