This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"Apollo Group (NASDAQ: APOL), my top pick for 2009, has been an education provider for over 30 years," says Kevin Kennedy, a specialist in quantitative and momentum analysis.
The editor of The Coolcat Report explains, "The company's revenues and earnings have been steady despite the negative economy."
The advisor continues, "Apollo Group provides academic access and opportunity to more than 350,000 students through its subsidiaries, which include University of Phoenix.
"Other divisions include the Institute for Professional Development, College for Financial Planning, Western International University, Meritus University, Insight Schools and Apollo Global. It also owns Aptimus, a provider of innovative digital media solutions.
"The company's educational programs and services are provided at the high school, undergraduate and graduate levels in 40 states and the District of Columbia; Puerto Rico; Alberta and British Columbia, Canada; Mexico; Chile; and the Netherlands, as well as online throughout the world.
"In the downtime provided by a weak economy, more people will look to improve their educational standing. Many are looking for education alternatives beyond the typical university or community college format, including online learning programs. Apollo Group fills this need for alternative education choices.
"At the same time, many government-funded institutions are seeing cutbacks as states grapple with budget deficits, so there is less room for enrollment, especially for 'lifetime learners.'
"More importantly, Apollo Group's steady revenue and earnings gains in a negative economic environment stand out. With more than $3 billion in annual revenues, annual earnings of almost $500 million and almost $500 million in cash on the books, this is a solid company.
"The company's revenue rose 15% in fiscal 2008, and earnings rose 17%. At nearly four times sales and with a PE of 26, the stock is not necessarily cheap, but you get what you pay for."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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