Monthly Archives: March 2012

Career Education: a troubled company with downside protection

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Since August 2010, the companies belonging to the For-Profit Education sector have been under pressure after the U.S. GAO (Government Accountability Office) launched an investigation designed to uncover potential frauds based on trying to enrol more students even when they didn’t have the right profile to be admitted to the school and/or to repay a federal loan provided by the Department of Education.

Let’s give a look at GAO original documentation:

“To conduct this investigation, GAO investigators posing as prospective students applied for admissions at 15 for-profit colleges in 6 states and Washington, D.C.. The colleges were selected based on several factors, including those that the Department of Education reported received 89 percent or more of their revenue from federal student aid”

Here are the results…

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Has Diamond Foods lost its sparkle?

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One of my best friends has been asking me this question for around 15 days. I tried to give a quick (and elusive) response, but it didn’t work.. so I decided to give him a more reasoned answer, trying to justify why I think what I think of Diamond Foods (DMND).

Diamond Foods business refers to snack products and culinary. It has three product lines: Snack, Culinary and Retail In-shell and Non-Retail. The company has a wide range of distribution channels and product facilities in the US, Canada and England.

But let’s have a look at the series of recent events that led the investing community to flee away from DMND…

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ITT Corporation (ITT): the Post-Spinoff Era

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ITT Corporation has been around for almost one century. In fact, it was founded in 1920 with the name of International Telephone & Telegraph. During the 1960s and 1970s, the company derived its growth from a long series of acquisitions, turning itself into an enormous conglomerate. In 1986 it sold the telecom assets (therefore separating its activities from its name) and in 1995 it split up into 3 separated publicly held companies (at the time of split the divisions were: insurance, industrial, and hotel/entertainment).

After the split (in the form of a double spinoff of the insurance and entertainment businesses), the company took the name of ITT Industries, Inc., which was once again changed to ITT Corporation in 2006 (actually, this was the post-spinoff name of its hotel/entertainment business, subsequently acquired by another company and delisted).

At the beginning of last year, the company announced its plans to separate into…

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Greenblatt’s Book Spin-off

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I think Joel Greenblatt is one of the best investors of all times. I’m not alone.

He impressed the investment community with his outstanding returns, based on his magic formula, which has proved to be a valid tool to use in order to design a successful investment program.

You can check his results in his The Little Book That Still Beats the Market, along with the rationale of this (apparently) simple strategy.

Anyway, I don’t want to delve into Greenblatt’s most famous book, also if I urge you to read it.

Why?…

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