Remember Apollo?

Dear readers!

Remember Apollo???!!! The article i wrote a while back. Do refer to my previous article on Apollo.

For the recent quater, they have beaten analyst estimates. And what i did not expect was the stock shooting up till $58 . I woke up one morning in Hong Kong amazed to find out that the price has shot up and it made me tremendously happy to know that my hypothesis was right. Usually, when there is lots of pessimism surrounding a stock, analysts will place over conservative estimates on the company. But this time the analysts were wrong and the market responded enthusiastically.

No one's valuation is ever correct. That being said, i am prepared to sell it when it reaches my intrinsic value of around $70.

On hindsight though, do allow me to critique my investing skills and be completely honest with everyone. I feel that compared to strayer education, this company generally has a poorer set of management. They are trying right now to diversify into other companies which i feel may not be aligned to their main business as online educators and may be willing to over pay for an acquisition. Clearly, management lacks a certain focus in their directions.

Online education in my opinion is set to grow in the years to come. The world needs to reach out to such an audience and Apollo is well positioned to do just that. However, with its recent options back dating woes and its inability to read the market, management just does not seem to know their real growth potential and despite its excellent cash flow, may be allocating capital in the wrong manner.

On hindsight, i know i did buy the wrong company as there were better candidates around.


Oh well, everyone learns don't they?? :)



Better and better,
Lucas