Table of Contents EDITOR’S COMMENTARY ............................................................................ 4 EXCLUSIVE INTERVIEW WITH GUY SPIER................................................ 6 ON THE INVESTMENT PROCESS… ............................................................................................... 6 ON GLOBAL FOR-PROFIT EDUCATION… .................................................................................... 13 ON INTERNATIONAL INVESTING…............................................................................................... 17 AND FINALLY… ......................................................................................................................... 18
SNAPSHOT OF 100 FIRMS WITH POTENTIAL PRICING POWER .......... 20 BY TYPE OF BUSINESS .............................................................................................................. 20 STOCK PRICE PERFORMANCE ................................................................................................... 22 FREE CASH FLOW ..................................................................................................................... 24 P/E MULT PLES ......................................................................................................................... 26 LATEST QUARTERLY EPS SURPRISE ......................................................................................... 28 REVENUE AND EPS GROWTH .................................................................................................... 30 PERCENTILE RANK WITHIN INDUSTRY ......................................................................................... 32 INSIDER BUYING AND OWNERSHIP ............................................................................................. 34
TOP THREE INVESTMENT OPPORTUNITIES........................................... 36 ............................................................................................ 36 – OWNED BY KEV N RICHARDSON ................................................. 40 – OWNED BY T M BARAKETT AND STEVE COHEN ............................................. 42
FOR-PROFIT EDUCATION COMPANIES................................................... 46 BULL V. BEAR: STEVE MANDEL V. JIM CHANOS ........................................................................... 47 KEY OPERAT NG AND VALUATION METRICS ................................................................................ 48 TUITION AND FEES – HISTORICAL EVIDENCE OF PRICING POWER? .............................................. 50 DO FOR-PROFIT INSTITUTIONS SPEND TOO LITTLE PER STUDENT? ............................................. 52 APOLLO GROUP (APOL) – OWNED BY STEVE MANDEL .............................................................. 53 BRIDGEPOINT EDUCATION (BPI) ................................................................................................ 56 CAPELLA EDUCATION (CPLA) ................................................................................................... 58 CAREER EDUCATION (CECO) – OWNED BY ANDREAS HALVORSEN ............................................ 61 CORINTHIAN (COCO) – OWNED INDIRECTLY BY BUFFETT VIA WPO ........................................... 64 DEVRY (DV) ............................................................................................................................. 67 GRAND CANYON EDUCATION (LOPE) ........................................................................................ 70 ITT EDUCATIONAL SERVICES (ESI) ............................................................................................ 72 STRAYER EDUCATION (STRA) – OWNED BY STEVE MANDEL ...................................................... 74
COMPANIES PROVIDING HUMAN CAPITAL SERVICES ........................ 77 HEIDRICK & STRUGGLES (HSII) ................................................................................................. 78 KORN/FERRY INTERNATIONAL (KFY) ......................................................................................... 80 KENEXA (KNXA) .......................................................................................................................82 MONSTER WORLDWIDE (MWW) ................................................................................................ 84 ROBERT HALF INTERNATIONAL (RHI) ......................................................................................... 86
OTHER INTERESTING BUSINESSES ........................................................ 88 AMBASSADORS GROUP (EPAX) – OWNED BY JOSH TARASOFF, NORBERT LOU .......................... 88 DUN & BRADSTREET (DNB) ...................................................................................................... 92 INFOGROUP (IUSA) ................................................................................................................ 94 LORILLARD (LO) – SOLD BY STEVE MANDEL .............................................................................. 97 MOODY'S (MCO) – (PARTIALLY) SOLD BY WARREN BUFFETT ................................................... 100 SPSS (SPSS) – TO BE ACQUIRED BY IBM .............................................................................. 103
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