People's attention was diverted away because they saw an increased risk to the group , said Matt Ankrum , a money manager at Janus Capital Corp
.Rebounding enrollment , rising profits and this year's drop in Internet-related stocks have gotten people excited about them again , he
, the group's most expensive stock by comparison with profits , trades at 54 times earnings per share during the past 12 months.Apollo
and Learning Tree , based in Los Angeles , both trade at more than 40 times earnings.The ratios are all well above the average of 24 for MidCap 400 stocks.How did falling prices give way to relatively high prices.For one thing , the industry bounced back from what Trace Urdan , an analyst at W.R. Hambrecht & Co.
, called disappointing enrollment growth trends.'.
We're as bullish on the company as we've ever been , '' Ankrum
said.For others , though , the issue now is whether shares of companies such as Apollo have risen too much too soon.Apollo , whose University of Phoenix unit is the largest U.S. college run for profit , was lowered to buy from strong buy July 28 at First Union Securities just because of its price.
A lot of people had forgotten that this is a regulated industry before the department audited the university's loan records , said Ankrum
, the Janus portfolio manager.Now they know that any potential rivals face government scrutiny , he
said.Finally , Education Management
headed off a lawsuit brought by more than 400 current and former students at its Art Institute of Houston
.The students claimed they were misled about the quality of their education.In March , an appeals court ruled that claims against the Pittsburgh-based company and the institute had to be resolved through arbitration , not in court.Apollo's plans to sell tracking shares , whose value will reflect the performance of the university's online programs , have also played a role in this year's rebound.The proposal shed light on how for-profit schools are making money on the Internet.