Data Point Soup
There was a lot going on today and the market was taking it all in. We were all waiting to see what Uncle Ben was going to say today and he did not really scare anyone so the market went up. It also got some help from the sometime accurate employment situation tell The ADP report. This is SOMETIMES as good indicator of what we might see in the Governments employment report on Friday. ADP reported 110,000 new private sector jobs. The estimates for the DOL report on Friday are about 90,000. That will keep us at an unemployment rate of 9.1% (Remember that is the data point called U-3. The REAL unemployment number is U-6 which is closer to 17%. Since we are talking about unemployment, our friends at Stansberry and Assoc sent on a cute quote from our Friend Nancy Pelosi. She was quoted as saying on July 1, Pelosi proclaimed in a weekly press briefing that the best way to stimulate the economy was to extend unemployment benefits - beyond the two-year limit. "It injects demand into the economy... It creates jobs faster than almost any other initiative you can name."
This week we hit a record for the number of people on food stamps. 45.8 million. That would be almost one in seven, as the S&A article pointed out. Now we have a federal government that is broke, and 38 out of 50 states that are broke, and the mass of people being supported by this system is growing everyday, and influential people in Washington are saying government support is a great way to grow the economy? What you say we ask the people in Greece how that's working out? (This message was brought to you by the mean, nasty greedy guy that must be part of the hated 1%) But I digress.
What Contest
As most of you know we started a stock picking contest in February and the winner will get the choose a charity of their choice and Devin and I will Match the winner's contribution up to $200.00. The criteria is overall performance at the end of the year. We had a clear winner through most of the year until Reed Hastings had some funy ideas about subscriptions at Netflix. Our contest leader quickly fell out of first place an accused Reed's parents of not being married at the time of his birth. That person is now safely in second place with a 1.2% gain YTD. Our first place winner is at 5.6% with two months to go. If anyone feels I have missed calculated and can beat the 5.6%, let me know.
A Break From Homework.
I know my last post was a bit overwhelming so we will give you a break on the balance of the AAPL homework. The next step would be to read the last 10Q and 10K on line at the SEC filings website.
Another New Position
We had a nice run with Apollo and Corinthian Colleges last year before the Title IV rule breaking and the entire sector went kurplunk. We have been watching the sector for things to cool down and find another distance learning slash (I guess you are supposed to put a slash like / or \ not actually spell out slash? Huh?) post secondary education company as we think this is an interesting industry with 16% unemployment.
We are liking BPI Bridgepoint Education, Inc. provides postsecondary education services. It offers associate's, bachelor's, master's, and doctoral programs primarily in the disciplines of business, education, psychology, social sciences, and health sciences. The company offers its programs at campuses located in Clinton, Iowa, and Colorado Springs, Colorado, as well as through online. As of March 31, 2011, it provided approximately 1400 courses, 80 degree programs, and 140 specializations. The company was founded in 1999 and is headquartered in San Diego, California.
The stock come fairly rated by Motley, IBD (in some criteria) and Morningstar. Yes we did our homework on the stock and like what we see. Here is the homework lite, no debt, relatively cheap per p/e valuations, price to book is a little rich but acceptable, TP allows a 20% margin of safety, and ROE is real sexy at 65%.
We were looking for an entry point below$23.00. We settled for $23.02. We are looking for 29 by this time next year and will get out at $21.10. DO YOUR HOMEWORK. We are long BPI.
That all for tonight Boys And Girls. Tommorow, think of a regret you have and fix it.
Salve Lucrum
