Few stocks are poised to benefit from economic woes and rising unemployment. One group, however, that appears to be an exception is for-profit adult education stocks.

These companies, which operate school campuses and online education programs, are viewed by some as beneficiaries of a growing need for worker retraining and the rising demand for education by those changing careers or re-entering the work force as adults.

Leo Fasciocco is a technical expert, specializing in finding stocks that are "breaking out" -- those moving above previous technical resistance levels or poised to do so.

His two of the latest breakout stocks featured in his The Ticker Tape Digest are both in the for-profit education field: Apollo Group (NASDAQ: APOL) and Devry Inc. (NYSE: DV). Here's his assessment.

"Apollo, based in Phoenix, is the largest for-profit education company, with more than 300,000 students. APOL focuses on working adults and operates 259 campuses and learning centers in 40 states, as well as various international locations.

"Programs range from associate to doctorate degrees in areas such as business, education, health care, technology. The company said it is showing solid enrollment growth. Annual revenues are $3 billion.

"The company recently reported that net for the fiscal fourth quarter excluding special items increased 20% to 75 cents a share from 62 cents a year ago. Revenues for the quarter rose 17%. Analysts had expected net of just 64 cents a share. So, results were a positive surprise.

"For fiscal 2009 ending August 31, analysts predict a 17% increase in net to $3.31 a share from $2.84 a year ago. The stock sells with a price-earnings ratio of 20, which is reasonable.

"Institutional sponsorship is very good. Five-star rated Janus Mid Cap Value Fund was a recent buyer of 550,000 shares. Also, 4-star rated GMO US Quality Equity III Fund recently picked up 779,000 shares.

"Devry, based in Oakbrook Terrace, Il., is one of the largest for-profit education companies, with annual revenues of $1.1 billion. DeVry University offers undergraduate and graduate programs in business and technology fields. They account for 77% of revenue.

"Under its health-care segment, Ross University offers medical and veterinarian programs, and Chamberlain College offers nursing degrees.

"Recently acquired schools add allied health programs. Its professional segment offers review courses through its Becker CPA review and Stalla CFA review programs.

"DV's technicals set up surprisingly well. The momentum indicator is strongly bullish. Recent price action shows good institutional buying interest. However, investors should be patient with this stock; we are looking for a key breakout over 58.50 before entering.

"The company tends to show consistently good earnings growth. This fiscal year ending June 30, analysts predict a 22% increase in net to $2.18 a share from $1.78 a year ago.

"The stock sells with a price-earnings ratio of 23, which is reasonable given the earnings growth rate. Looking out to fiscal 2010, the Street projects a 24% gain in net to $2.69 a share.

"The largest fund holder is 5-star rated Baron Growth Fund with a big 5.2% stake. It has held its position steady. A recent large buyer was 5-star rated Hartford Midcap Fund, which purchased 385,000 shares.

"Over the past 2 years shows, DV's stock has appreciated 120%. That easily outperformed the S&P 500 index which declined 25% over the same time. Recent price action shows good institutional buying interest.

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.

Apollo Group (NASDAQ: APOL) is a for-profit educational institution, offering programs for working adults. The firm operates more than 160 learning centers and 100 campuses, granting degrees through its University of Phoenix, Western International University, Meritus University and College for Financial Planning subsidiaries. High school credits are provided through the firm's Insight Schools unit. Facilities are located in 40 states, the District of Columbia, Puerto Rico, Canada, Mexico, Chile and the Netherlands. A variety of programs are available on-line, as well. Apollo's Institute for Professional Development generates working student curricula for other colleges. Apollo Global is a joint venture with The Carlyle Group for investing in the international education services sector. On Monday evening, the company announced that it had selected Credit Suisse managing director Charles Edelstein to be its new CEO.

Apollo pleased investors last week, when it reported better-than-expected profit and revenue on higher enrollment. Fiscal Q3 EPS and revenues came in at 85 cents and $835.2 million, respectively. Analysts had been looking for 78 cents and $806.9 million. Management also said the board had authorized an increase in the share repurchase program to an aggregate of $500 million. Lehman Brothers subsequently reiterated its "overweight" rating on the issue (target = $64) and Stifel Nicolaus reiterated its "buy" (target = $70).

With a slowing economy and corporate layoffs being announced daily, look for online education companies to benefit. Many unemployed are and will be looking for a profession, and many employed people are always looking to make career changes. Online education companies are therefore enjoying higher enrollment rates.

Shares in Apollo Group (NASDAQ: APOL) are surging over 20% on a strong earnings report.

According to the AP: " Total degree enrollment rose 11 percent during the quarter to 345,300 students, versus a year ago. Apollo has boosted student retention with expanded academic programs, improved courses and other services." The company even managed to raise tuition by 4-10% depending on the program.

Pretty good business climate if you can both raise prices and increase enrollment. With a continuing weak economy, look for shares in online education to potentially be an interesting trade in a struggling economy.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/2/08.

Joseph L. D'Amico, the CFO of embattled for-profit college provider Apollo Group, Inc. (NASDAQ: APOL), has purchased 10 thousand shares of the company's stock, according to a form 4 filed with the SEC.

The stock is up 6% today but before you get too excited about this tremendous display of faith, look at in context. Back in February, I wrote about the wave of insider sales at the company that foretold a substantial decline in the share price following a disappointing earnings report.

Further evidence of the company's status as a corporate governance outhouse: a jury recently found the company liable for $277 million in a securities fraud class-action lawsuit, and William Trent recently took an interesting look at the company's accounting woes.

At Apollo, a sustained record of poor stewardship speaks much louder than an acquisition of $400 thousand worth of stock by the CFO. I would even speculate that he bought stock in part to demonstrate faith in the company -- a sort of Potemkin Village of insider buying. Insider trading can be an interesting indicator of management's faith in a company, but it doesn't necessarily follow that one might buy the stock based on this trade.

Shares of for-profit college provider Apollo Group, Inc. (NASDAQ: APOL) are off more than 25% today after the company reported dismal second quarter results, driven down by lower than expected enrollment and increased expenses.

Could investors have seen it coming? Maybe. Back in February the New York Times wrote about an ominous sign of trouble at the company, which I also blogged about: insiders were selling shares in the company like there was no tomorrow, and stock buybacks had ground to a halt.

I'm not suggesting that there was any impropriety here. Au contraire, we should at least commend them for stopping the buybacks, rather than using shareholder capital to inflate the price while insiders sold. But maybe there was something more sinister. Apollo doesn't exactly have the best corporate governance reputation on the planet, having recently been found liable in a $277 million class-action lawsuit.

Earlier this month, I wrote about concerns that the credit crunch might create problems for for-profit educational providers like Apollo Group (NASDAQ: APOL) and ITT Educational Services (NYSE: ESI).

The concern is that student loans will be tougher to come by and demand for these companies' services will fall. In addition, a tighter economy and tough job prospects might make would-be students less willing to pony up.

Now, the New York Times is reporting on a wave of insider sales at Apollo combined with the company's decision to bring its share buybacks to a standstill. With numerous questions surrounding the future of the industry, investors may be looking to insider trading for reassurance. But they don't seem to finding it.

Apollo has long held a reputation for being something of a corporate governance pigsty -- a jury recently found the company liable in a $277 million shareholder class-action lawsuit. Insider sales and a relatively high valuation combined with serious questions about the company's prospects make this a stock I wouldn't dream of owning.

The Wall Street Journal's "Heard on the Street" column(subscription required) presents a strong bearish case for the for-profit educational providers -- companies such as University of Phoenix operator Apollo Group (NASDAQ: APOL) and ITT Educational Services (NYSE: ESI).

Sallie Mae (NYSE: SLM), a major provider of student loans, has tightened up its lending practices, and that could make career education less affordable for a lot of students.

According to the Journal, "The problem is that the schools will likely struggle to sustain their growth rates because of the tight lending environment and the slower-growing economy. If students have a tougher time borrowing, they may need to pay more out of their own pockets. But if their job prospects are looking rocky, or if they are worried they could be laid off from existing jobs, they won't want to shell out the tuition themselves."

But there may be another element to this that could make the outlook even more bleak for these companies, many of which have a lackluster reputation due to run-ins with regulators and questions surrounding their reporting and the value of the services they provide. Students attending career colleges are also thought to be at greater risk for default.

But here's another rub: Massachusetts' Democratic Governor Deval Patrick has proposed making two-year colleges free for all students -- a move like that would be devastating to the for-profit colleges. If that comes to pass in Massachusetts, or if other states make similar, less radical efforts to lower the cost of two-year colleges, for-profit colleges could see enrollment plummet.

Investors in these stocks will want to keep a close high on the political climate.

Since the early 1970s, the Apollo Group (NASDAQ: APOL) has transformed the private education business. The company not only has a broad network of campuses called the University of Phoenix, but also a thriving online education system.

As seen with yesterday's fiscal Q1 results, Apollo is continuing to grow at a nice clip. Net income increased 23% to $139.9 million, or $0.83 per share. Revenues were up 17% to $780.7 million.

Apollo got a boost from enrollments, which increased 11% to 325,000. But the company has also made important strides with student retention as well as the quality of the curriculum.

True, there are worries about the credit crunch. Just take a look at school loan provider Sallie Mae (NYSE: SLM), which plans to pull back somewhat. Yet, Apollo has anticipated some of this and has tried to reduce its reliance on private student lending.

Bloomberg News reports that private equity is on track for a record year of fees paid to Wall Street. LBO firms paid investment banks $8.4 billion during the first half of 2007, putting the buyout industry on pace to exceed 2006's $12.8 billion. If the current pace continues -- and that's a big if given the financing challenges they have been facing -- LBO firms would pay $16.8 billion to Wall Street by the end of 2007, a 31% increase over 2006.

Who's paying the fees? Here are the top four:

• Blackstone Group LP (NYSE: BX): $685.4 million
• KKR: $334.8 million
• Apollo Management: $407.5 million
• CVC Capital Partners Ltd.: $309.1 million

MOST NOTEWORTHY: Dominion Resources (D), Digene (DIGE) and Deutsche Bank (DB) were today's noteworthy downgrades:

• BMO Capital downgraded shares of Dominion Resources Inc. (NYSE: D) to Market Perform from Outperform citing the sale proceeds for its onshore U.S. E&P properties that were below expectations.
• Digene Corp. (NASDAQ: DIGE) was downgraded to Sell from Neutral at Ferris Baker Watts based on the acquisition by Qiagen (NASDAQ: QGEN). Digene was also downgraded at SummerStreet to Neutral from Buy, as the firm views the Qiagen's acquisition for $1.6B as reasonable.
• Deutsche Bank (NYSE: DB) was downgraded to Underweight from Neutral at JP Morgan, as the firm sees better value in traditional credit-exposed banks.

OTHER DOWNGRADES:

• Norsk Hydro (NYSE: NHY) and BP PLC (NYSE: BP) were downgraded to Hold from Buy at Citigroup.
• Quiksilver Inc. (NYSE: ZQK) was downgraded to Neutral from Outperform at Robert W Baird due to valuation.
  
• Banc of America downgraded shares of SunTrust Banks Inc. (NYSE: STI) to Neutral from Buy on valuation as they believe further sales of Coke may not be very accretive to EPS.
• LifePoint Hospitals Inc. (NASDAQ: LPNT) was downgraded to Hold from Buy at Jefferies based on valuation.
• Clear Channel Outdoors Holdings Inc. (NYSE: CCO) was downgraded to Hold from Buy at DBAB on valuation.
• Matrix USA downgraded shares of Apollo Group Inc. (NASDAQ: APOL) to Hold from Buy to reflect rising costs and lower enrollment rates.
• Matrix also downgraded True Religion Apparel Inc. (NASDAQ: TRLG) to Hold from Buy on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

This week, Harrah's Entertainment (NYSE:HET) filed its proxy for its $17.1 billion buyout deal. The buyers include Texas Pacific Group and Apollo Management Group.

Clearly the big winner is Harrah's CEO, Gary Loveman, who will snag as much as $94 million if he gets the deal done. He even gets another $18.9 million if he leaves after the deal is closed.

Interestingly enough, before joining the company in 1998, Loveman was actually an Associate Professor at the Harvard University Graduate School of Business Administration.

Although, Harrah's will definitely need his brainpower to deal with the complex regulatory process. In the proxy filing, there are 12 pages that detail all the regulatory approvals that will be required.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Perhaps a sign of where the next bull market in real estate can be found, the famed private equity firm the Apollo Group announced that it would join forces with Indian firm Sun Group to form a 2 billion dollar fund to invest in Indian real estate. In recent months, six new companies gained listing on London's Alternative Investment Market for the purpose of investing in India.

Earlier this month, I wrote about the co-founder of the Caryle Group telling Maria Bartiromo that his fund planned to double its investment in Asia in 2007. With private equity money flowing into Asia so rapidly, I believe that those markets could be well-poised for a good showing this year.

After peaking at $98 a share in June 2004, Apollo Group' s stock has headed straight downhill and now trades at about $41.

After a great bull run that began in 1995, the industry began to mature and these stocks rolled over.

We blogged earlier today about how Pequot Capital's chief, Art Samberg, likes cotton. He also is looking for a turnaround in publicly traded education stocks. The stocks he likes are Apollo Group (NASDAQ: APOL), Career Education (NASDAQ: CECO) and Corinthian Colleges (NASDAQ: COCO).

Apollo has been putting a lot of money into its on-line community college program, Axia College, which it hopes can accelerate Apollo's growth rate. Management is hopeful Axia will be a feeding tube for its four-year on-line college, University of Phoenix.

Samberg also believes Career Education, which has been a real bloodbath, could be ripe for a turnaround under new management.

Publicly traded education stocks, as an industry, have stayed away from using leveraged balance sheets. Samberg notes that if current valuation persists and if fundamentals start improving, private equity firms could find these companies very attractive.

From Sunday to Tuesday, the private equity firm Apollo Group struck $37 billion in deals, buying Realogy and Harrah's. This is the subject of an excellent piece in today's New York Times.

The master of the universe at Apollo is Leon Black. And he is a veteran. During the 1980s, his mentor was Mike Milken. If you look back into the 1980s, Milken did some big deals in the casino industry (he was the key backer for gaming mogul Steve Wynn). So it makes sense that Apollo is gravitating to the gambling space with its big play for Harrah's.

Black has a knack for finding value. When the junk bond market imploded in the late 1980s, he was there to buy the gems. He is also has lots of experience with distressed companies and understanding the intricacies of bankruptcy.

If the boom in private equity deals falls apart (which seems inevitable), Black will probably know how to capitalize on that situation too.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Over the past few years, the stock price of Jacuzzi (NYSE: JJZ) has been stuck in a trading range of about $8 to $10. It has certainly been frustrating and, as a result, the company decided to go private – with the help of the private equity firm, Apollo Management LP.

The offer is for $12.50. Actually, this is still below Jacuzzi's 52-week high of $12.56. The total value of the deal comes to about $990 million -- which is actually a fairly small deal compared to recent blockbusters, such as HCA and Freescale.

Jacuzzi has been undergoing a restructuring, which is starting to show results. This should set the stage for a strong 2007.

Also, another big attraction is the company's brand. Actually, it was the Jacuzzi brothers who started the company in the early 1990s. And, over the years, the company has been able to acquire over 200 patents on its innovations.

In other words, there is stability with Jacuzzi, which is key with private equity. Basically, this looks like a pretty easy deal to get done.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.