Ockham Research submits:

There has been a lot of talk about for-profit educators such as DeVry (DV) as unemployment continues to worsen. The thinking goes that people who are out of work tend to go back to school in order to improve their skills in the eyes of potential employers. We wrote an article on this phenomenon in November (DeVry Thrives as Unemployment Spreads) when unemployment hit a 16-year high and the numbers have only gotten worse since.

Since that post, the stock ran up 22% before DeVry reported its fiscal second quarter earnings, which were in-line with estimates. These results were actually quite good, especially the 35% increase in revenue. However, the fact that DeVry’s operating performance continues to excel in a miserable economic environment yet DV’s stock market reaction has been muted at best reeks of overvaluation.

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