Bridgepoint Education (NYSE:BPI)

CAPS Rating: 4 out of 5


Player Avatar XMFConnor (97.85) Submitted: 7/12/2011 5:23:51 PM : Outperform Start Price: $19.16 BPI Score: +25.54

This has been a great trade, both in CAPS and Real Life, for me thus far. I followed Special Ops on this one because I really loved the thesis. Essentially, I believed that the for profit sector had fallen so much due to the scrutiny that any company in the sector, regardless of their exposure to potential regulations, was beaten down just like the rest of them. This created too much selling pressure on the players with the least risk, or the "least bad" in the industry.. such as BPI.

In this way, it was very similar to ATW, which I bought right after the BP oil spill... all the offshore drillers got hammered, even though only some had exposure. Lesson: When an entire industry is brought down for some reason, search for stocks not affected that have been caught up in the mess.

On my 10 point scale, it gets at least an 8 because the price was a full 5 at essentially 3X EV/EBITDA and the business, even with potential regulations, gets at least an average 3, or maybe even a 4-- making this an 8 or 9/10.

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