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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerEarlier 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 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.
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