Monday, March 16, 2009

Strayer finally shows some cracks

Strayer finally hit a low today of 143, closing down 20 to 150 after being propped up by management's buybacks and longs that wanted to rig this stock.

That not new news here though, but it's taken a long time for this number to come down.

But back in November, when the stock was 70 points higher, and Wall Street was falling all over themselves to buy it, at least there was a skeptical viewpoint here on this number.

But I'm now picking my battles elsewhere.

If you were short, this number still made you suffer before you got paid!

Strayer Education (STRA 214.95) is just a smidge off of it's 52 week high of 224, and up from it's low of 162 only last month. This is another stock being propped up by Wall Street, where they convinced management to buy back their stock at ridiculous "bargain" prices of 40X earnings and 10X revenue...

In Strayer's annual report, they talk about buying back stock when it is below it's intrinsic value. Strayer said their model lacks mathematical and scientific precision, but shareholders should rest assured that their Board of Directors engages in a thorough review of that calculation.

The board of directors is preaching to the choir, and buying back stock at $218 is a waste of shareholder money.

Especially when the stock broke down last month, and is rolling over on the charts.

Sell it to management with their "intrinsic value" calculations. If they want to waste shareholder money by buying over-priced paper, let them take some stock off of your hands.

So much for managements judgement on intrinsic value!

No comments: