On Dec 31, Zacks Investment Research upgraded
Apollo Education Group, Inc.
), a leading private education provider in U.S, to a Zacks Rank
#1 (Strong Buy) following the company's acquisition of Open
Colleges Australia Pty Ltd.
Why the Upgrade?
Apollo's stock gained significant momentum after it announced its
agreement to acquire 70% of the outstanding stock of Open
Colleges Australia Pty Ltd (also known as Open Colleges) on Dec
Apollo Global, the wholly-owned subsidiary of Apollo Education
Group, will purchase in cash for about $98.5 million. The
purchase consideration also includes a contingent payment of
about $47 million based on 2014 operating results. Moreover, the
agreement allows Apollo Global to purchase the remaining 30%
stock in future. The acquisition is expected to be completed by
the second quarter of 2014.
APOL has adopted several strategies in order to drive business
growth. The acquisition of Open College is in line with Apollo's
long-term strategy of global expansion. Open Colleges is one of
Australia's oldest and largest providers of distance
learning. As such, the acquisition will allow Apollo Global
to access the growing education market in Australia and focus its
resources in the high-potential international education market.
Another education company growing through acquisition includes
American Public Education, Inc.
). Back in Nov 2013, American Public acquired Ohio-based National
Education Seminars, Inc., also known as Hondros College (Nursing
Programs). The acquisition is in line with APEI's long-term
strategic plan of focusing on quality education, improving
student retention and enhancing the quality of health, science
and technology programs.
Other than growth through acquisition, Apollo Group is
consistently enhancing and expanding its services/programs and
investing in academic quality to improve student experience and
outcomes. In mid Nov 2013, the company introduced an additional
Masters of Business Administration program in Finance. The new
program is an addition to the existing list of Master of Business
Administration, Master of Management and Master of Science in
Accountancy programs. The new program is expected to cater to the
growing demand for financial advisors.
Apollo's other initiatives include investments in adaptive
learning and curriculum development, and introduction of a new
learning and service platform. The company is also working toward
developing new learning systems and is continuously enhancing and
expanding student support service offerings. Such initiatives
help improve retention rates. In addition to this, the company is
offering more discounts and scholarships to improve affordability
and student value proposition.
Other Stocks to Consider
Other stocks worth considering in the education sector include
New Oriental Education & Technology Group
Xueda Education Group
). Both these stocks carry a Zacks Rank #2 (Buy).
AMER PUB EDUCAT (APEI): Free Stock Analysis
APOLLO GROUP (APOL): Free Stock Analysis
NEW ORIENTAL ED (EDU): Free Stock Analysis
XUEDA EDUC-ADR (XUE): Free Stock Analysis
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