ETFS Cocoa (BIT:COCO)
Historical Stock Chart

From Jun 2019 to Jun 2024

Shares of major education companies rose Wednesday, two days after federal officials sought to reassure the for-profit education industry amid speculation of a regulatory crackdown.

Apollo Group Inc. (APOL), which owns the University of Phoenix, was up over 4% to $66.40 as trading closed. DeVry Inc. (DV) was up over 5% to 48.81. Strayer Education Inc. (STRA) was nearly 4% higher at $212.87. Career Education Corp. (CECO) was up over 4% to $21.55. Corinthian Colleges Inc. (COCO) rose nearly 6% to $16.34.

Other publicly traded education firms also traded in ranges about 4% to 6% higher than their opening on a day when investors watched the market stall, and doubts about the recovery grow.

Apollo, Strayer and other top firms still trade well under their 52-week highs. Apollo topped out at $90 in January as investors sought cover in countercyclical for-profit education stocks. Strayer's high of $239.99 was reached in November.

The stalling of the overall market sent some investors hurrying for education stocks this week, said Trace Urdan, an analyst at Signal Hill Group.

But investors were also reassured when a federal official told an audience at the Career Colleges Association's annual conference Monday that the department is "agnostic" about for-profit or nonprofit management structures when it designs federal rules, Urdan said.

The official, acting Assistant Secretary for Postsecondary Education Dan Madzelan, couldn't be reached immediately.

"Our consistent message is that quality is what matters - that students get what they pay for, and that taxpayers are well-served," Massie Ritsch, Education Department deputy assistant secretary for external affairs & outreach, told Dow Jones Newswires. "They can be 4-year, 2-year, Ivy League or night school ... It's just a question of whether Wall Street hears it."

Bob Cohen, president and CEO of the Career College Association, said in an interview that some investors had sought to sow fear that the Obama administration would deliberately target profit-making education firms. "Some folks don't understand how Washington works, and others were just making things up," he said.

Investors were also reassured by the dullness of a federal Education Department public hearing on higher-education rulemaking in Denver, Urdan said. Some had expected student complaints against for-profit education firms. "It was a major yawn."

Public hearings are slated in the coming week for Philadelphia and Little Rock, Ark.

-By Brendan Conway, Dow Jones Newswires; 212-416-2670; brendan.conway@dowjones.com