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Two Ways: Apollo Group Drops Knowledge on the Street


Strengthen your portfolio in good times and bad.

Shares of Apollo Group (APOL) are higher in after-hours trading. The education provider reported third-quarter earnings of $1.26 a share, $0.14 better than Wall Street's consensus estimates. Revenues rose 27% year-over-year, to $1.04 billion, which was in line with expectations.

In a press release, the company said student enrollment grew 22.6% on a year-over-year basis in the third quarter; that was slightly less than the 23.1% year-over-year growth it experienced in the second quarter.

Apollo's star product continues to be the University of Phoenix, which showed a 21.8% year-over-year increase. The increase in enrollment also came with improvements in operating margins, as the company was able to both leverage its fixed costs and realize savings, due to lower negotiated contract costs in financial-aid processing and other areas.

Shares rose 6% in the post-session.

From the Bull Pen: As far as consumer focus, bulls can look to the XLY (consumer discretionary ETF). Those playing XLY can set a sell stop near $22 support. See the daily chart below:

Click here to enlarge.

From the Bear Cave: Education stocks have done well in previous recessions, but the current one is far from normal. Those bearish on Apollo can look for an entry point on a technical basis near $77 (if it gets there). A buy stop can be set 2% above that level.

Have a great night!
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