Apollo Group (APOL) got hammered during Wednesday's after-hours session. It closed down almost 15% to $42.10. The 52-week low for the stock is $38.39 while the 52-week high is $76.86. As can be seen by the yearly range, the company isn't so popular right now.

The one-year chart is rather lousy, although shares of the education entity, which owns University of Phoenix, have rebounded a little in recent times. That may end up not meaning much, though, considering the recent negative price action.

Apollo Group (APOL- option chain) shares are rising today even though the U.S. Department of Education released an ugly study of federal loan repayment rates by former students of for-profit schools. The data shows that students at for-profit schools pay back federal loans at a 36% rate compared to 54% at public institutions. APOL, which runs the University of Phoenix, is higher today after comments from Deutsche Bank that indicate the school will expand its bachelor;s degree program. In contrast, both ITT Educational Services (ESI) and Devry (DV) are both down more than 9% so far today. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on APOL.

APOL opened this morning at $39.37. So far today the stock has hit a low of $39.34 and a high of $44.54. As of 12:20, APOL is trading at $41.49 up @2.53 (6.5%). The chart for APOL looks neutral and S&P gives APOL a neutral 3 STARS (out of 5) hold ranking.

Apollo Group (APOL - option chain) stock is trading lower today after the for-profit education company behind the University of Phoenix forecast second-quarter EPS of 77 cents to 82 cents. Excluding one-time items, the company expects to post EPS of 84 to 91 cents, which is well below analysts' projections 94 cents. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on APOL.

This morning, APOL opened at $55.32. So far today the stock has hit a high of $58.16 and a low of $55.25. As of 12:50, APOL is trading at $57.04, down $4.41 (-7.2%). The chart for APOL looks neutral and S&P gives APOL a neutral 3 STARS (out of 5) hold ranking.

Apollo Group (NASDAQ: APOL) was recently trading at $58.52 in after market trading, below its close of $72.97. APOL announced an informal inquiry into its revenue recognition practices. APOL November option implied volatility went out at 52, December at 45; verses its 26-week average of 49, according to Track Data, suggesting non-directional price movement.

CBOE Volatility Index: VIX was up 64 cents to 24.96.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Education firm Apollo Group (NASDAQ: APOL) announced third-quarter earnings after the closing bell sounded yesterday, with earnings coming in better than a year ago thanks to higher enrollment. The company raked in $201.1 million, or $1.26 per share in the latest quarter, far better than $139.1 million, 85 cents per share a year ago. Not only did the company top last year's performance, but it also bested the Street's estimate for earnings of $1.12 per share on revenue of $1.04 billion.

Enrollment at the online college grew 22% on a year-over-year basis to 420,700 in the third quarter. The company's co-CEO Chas Edelstein noted, "We are please to report a record third quarter, driven largely by continuing increases in enrollments and improved student retention at University of Phoenix." The company's selling and promotional expenses increased during the quarter, but they declined as far as a percentage of net revenue.

Apollo Group Inc. (NASDAQ: APOL) owns University of Phoenix, which posted an 11% enrollment increase to 325,000 students, as well as a consolidated revenue increase of 17% to $780.7 million for 1Q2008. But this is old news. Nevertheless, the stock jumped 10% on January 31 to close at $80.64, well up from its close of $68.11 on January 8 when the quarterly earnings figures were released.

Two recent events accounted for this jump. Apollo Group's legal troubles were not as serious as previously anticipated, in the $166-277 million range instead of much higher. The company has stated it intends to fight the verdict vigorously.

The second event is that Apollo Group is well placed to respond to increased demand for specific job-related post secondary educational opportunities for working adults in the U.S. Unlike its competitors in te for-profit adult education marketplace, Apollo Group is also well placed to respond to growing international demand for U.S.-provided online and in-class post secondary education. The company recently formed a joint venture with Carlyle Group and Apollo Global to expand its student base internationally.

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.