Education Names Catching A Bid After Brutal Sell-Off (STRA, LOPE, CPLA, LINC)

A number of private education stocks are rising on unusual volume today after the sector was crushed on Monday when the Department of Education released a report showing that nearly two-thirds of the schools' students did not repay federal loans. Among the names that have been particularly active are Grand Canyon Education LOPE, Capella Education CPLA, Lincoln Educational Services LINC, and Strayer Education STRA. Keep in mind, however, that the activity may not necessarily be new bullish buyers stepping into the names, but rather short covering. This sector has been targeted by a number of prominent hedge funds in 2010 on the short side. FrontPoint Partners' Steve Eisman gave a presentation at the Ira Sohn Investment Conference on May 24th, outlining his bearish stance on the sector, and he has been proven right. Another hedge fund that we think is likely involved on the short side is Dan Loeb's Third Point Capital. Here is a breakdown of the aforementioned stocks movement today: LOPE - +12.37% CPLA - +7.17% LINC - + 5.63% STRA - 6.70%