Charles De Vaulx’s International Value Advisors has filed a 13G concerning its holding in DeVry Education Group Inc. (NYSE:DV). The freshly-amended filing discloses the fund’s ownership of 12.77 million shares in the company, which represent 20.04% of its common stock. This marks an increase of 3.21 million shares since International Value Advisors submitted its previous filing on DeVry.
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International Value Advisers is a New York-based investment management firm established in October 2007. Charles De Vaulx, who currently serves as Chief Investment Officer and Portfolio Manager at International Value Advisors, joined the firm in May 2008. The investment approach employed by the French-born asset manager can be described as global, cautious, and opportunistic. He generally aims at minimizing drawdowns during bear markets, which can be evidenced by the fact that his fund lost only 12% during the financial crisis of 2008. International Value Advisors mainly focuses on identifying noncapital-intensive businesses that have more pricing power than competitors. Even more to that, the firm manages a diversified portfolio worth $3.96 billion as of March 31, with the top ten holdings accounting for 63.48% of its entire portfolio. Charles De Vaulx claims that concentrated portfolios work only if their managers are geniuses like Warren Buffett.
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DeVry Education Group Inc. (NYSE:DV) is an Illinois-based corporation that operates several for-profit higher education institutions, which include: American University of the Caribbean School of Medicine, Becker Professional Education, Carrington College, Chamberlain College of Nursing, DeVry Brasil, DeVry University and its Keller Graduate School of Management, Ross University School of Medicine, and Ross University School of Veterinary Medicine. The shares of DeVry Education Group have dropped by over 38% since the beginning of the current year, and analysts believe that there is not much upside for the company in the coming years. First Pacific Advisors LLC, overseen by Robert Rodriguez and Steven Romick, is among the largest shareholders of the company within our database, with a 2.16 million-share stake as of March 31.
Just a little while ago, analysts at Deutsche Bank, one of the leading financial service providers in the world, downgraded their rating on DeVry Education Group to “Hold” from “Buy”, and reduced their price target to $34 from $40. Deutsche Bank declared that it lowered the rating based on the worsening trends in the U.S. for-profit education industry. And the decline is clearly in progress. As stated by the National Student Clearinghouse Research Center, for-profit student enrollment decreased by 4.9% compared to last spring. As a result, the decrease in enrollment puts downward pressure on the revenue generated by DeVry Education Group. It is believed that the for-profit sector is currently in the bust period of its systematic boom-and-bust cycle. Whereas, one of the main competitors of for-profits are the non-profits in the online market, which have been gaining ground over the last few years. Therefore, it is really hard to see how DeVry Education Group can achieve a much-needed turnaround.
DeVry Education Group is set to post its fourth-quarter and year-end financial results on August 18, so it would be worthwhile to investigate whether the transformation strategy that has been undertaken by DeVry University lately is making progress. The Illinois-based corporation previously announced its plans to improve the competitive positioning of DeVry University and return the institution to growth. It’s quite clear that the transformation process is not likely to be reflected in the financial performance of the company for the fiscal fourth quarter, but the updates that are anticipated to be provided by the officials at DeVry Education Group will give an idea of how successful the process has been so far. In the meantime, DeVry Education Group posted total revenue of $1.44 billion for the fiscal third quarter of 2015 that ended on March 31, which yielded a decrease of 0.1% year-over-year. At the same time, the diluted earnings per share came in at $1.68, compared to $1.49 reported last year.
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