Is Apollo Education Group Inc (APOL) Still Undervalued After Yesterday’s Acquisition News?


Yesterday, we reported that Apollo Education Group Inc (NASDAQ:APOL) had agreed to be taken private in a $1.1 billion deal. The deal, which is not completely official as of yet, would see shareholders receiving $9.50 per share that they currently own. This represents a potential 9.8% gain for investors who purchase the stock at its current price of $8.65.

Frankly, it is a bit surprising that we haven’t seen this stock increase more. Perhaps investors are still slightly unsure if the deal will actually go through, but if it does, which we have no reason to believe it won’t, a 9.8% gain would be a significant return.

The stock is up 0.35% or $0.03 following the news, hitting $8.65 per share. About 134,826 shares traded hands. APOL has declined 33.90% since July 6, 2015 and is downtrending. It has underperformed the S&P500 by 24.42%.

From a total of 3 analysts covering Apollo Education (NASDAQ:APOL) stock, 1 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 33% of the ratings are positive. The highest target price is $13 while the lowest target price is $8.50. The mean of all analyst targets is $9 which is 4.05% above today’s ($8.65) stock price. Apollo Education was the topic of 5 analyst reports since October 23, 2015 according to the firm StockzIntelligence Inc. BMO Capital Markets maintained shares on January 12 with a “Outperform” rating.

The institutional sentiment decreased to 0.95 in Q2 2015. It’s down 0.15, from 1.1 in 2015Q2. The ratio fall, as 41 funds sold all their Apollo Education Group Inc shares they owned while 62 reduced their positions. 22 funds bought stakes while 76 increased their total positions. Institutions now own 101.80 million shares which is 9.22% more than the previous share count of 93.20 million in 2015Q2.

Armistice Capital Llc holds 3.32% of its total portfolio in Apollo Education Group Inc, equating to 880,000 shares. Altalis Capital Management Llc owns 295,625 shares representing 1.92% of their total US portfolio. Moreover, Diversified Investment Strategies Llc has 0.87% of their total portfolio invested in the company, equating to 65,625 shares. The California-based First Pacific Advisors Llc has a total of 0.73% of their portfolio invested in the stock. Quinn Opportunity Partners Llc, a New York-based fund reported 133,000 shares owned.

Since April 2, 2015, the stock had 0 insider purchases, and 2 sales for a total of $28,591 in net activity. Newton Frederick James sold 1,494 shares worth $16,449.

Apollo Education Group, Inc. is a private education provider. The company has a market cap of $938.86 million. The Firm offers undergraduate, graduate, certificate and non-degree educational programs and services, online and on-campus, principally to working learners in the United States and abroad. It currently has negative earnings. The Company’s divisions are University of Phoenix, Apollo Global and Other.