Oppenheimer Out With Report On Education Names (DV, CPLA, LINC, APOL)

Oppenheimer & Co. is out with a research report on the education names, such as DeVry, Inc. DV, Lincoln LINC, Capella CPLA and Apollo APOL. In the report Oppenheimer & Co. notes, "Within our coverage, DeVry (DV, O), Lincoln (LINC, O), Capella (CPLA, O) and Apollo (APOL, P) had institutional 'repayment rates' in the "safe zone" of 35-45%. ITT (ESI, P) and, surprisingly, Strayer (STRA, P) were <35%, which will likely not be well received by the market. As a reaction to its surprisingly low institutional 'repayment rate' of 25%, STRA said in a press release Saturday (8/14/10) that it was able to contact the DOE over the weekend and will host a conference call at 7:30AM ET today (877-718-5108). We anticipate continued volatility in the for-profit education space on potential legislative action and continued GE (regulatory) uncertainty. We maintain our ratings, but reduce our targets on CPLA to $90 from $106 and LINC to $17 from $21. We remain wary on the space, though opportune entry points are emerging for long-term investors."