DailyTrends.com Small Cap Pick of the Week: College Partnership (CGPA)
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College Partnership should be cordially "accepted" into every portfolio this year.
It is a full service education and preparation company that helps students "discover and achieve their goals."
CGPA is the result of four companies merging into one, that all happened to provide counseling and financial help to students and athletes that were making the transition from high school to college. With record enrollment in colleges and universities across the country, more complicated rules with getting financial aid, and a shortage of high school counselors, I can smell the profits rolling.
Even though we currently have a less than stellar economy, many parents must still resort to (CGPA) for help. Nowadays, taking your kid to receive a higher education is a BIG investment, and more and more families are resorting to college planners. I knew multiple people in my high school (as well as other schools) who were paying independent college counselors $80 bucks an hour, just for telling their parents which college they would fit in best!
This is a trend that will only get stronger in the future, and CGPA presents both students and parents affordable rates for information that is highly consequential to their success. Specifically for students, CGPA tries to find an ideal college that the student will find comfort in, both socially and intellectually. They later help the student apply and get accepted (hopefully), while teaching them about what to expect in college, and future career goals. Parents benefit from their financial advice by learning how to pay for this four-year (often more) investment.
I personally recommended this company back in March of 2003 in BusinessWeek magazine. Here is the article:
I've also met up with Co-Founders, Dr. Janice Jones and Mr. John Grace, in person when they came down to Los Angeles, and have actively followed the company ever since.
In the last twelve months, College Partnership has been revamping its look, restructuring its objectives, and making sure it provides the best consultancy services to parents nationwide.
I spent time with Mr. Ed Doody, President, this week to get a better understanding of where the business is now and, more importantly to all the members, where the company is heading.
Lahiji (DailyTrends.com): Ed, please summarize what your company does for teenagers?
Mr. Doody (CGPA): - College Partnership, Inc. is a full-service college planning company offering students and their family integrated resources and services to guide them through the college preparation process. College Partnership's suite of products and services integrates career planning, college major/field of study selection, college selection, preparation for college entrance tests, aids for improving study skills as well as searches for merit awards. The products consist of printed materials, videocassettes, college major/field of study software, career assessment software, databases accessible through CD-ROM and one-to-one coaching. For more information, please visit http://www.collegepartnership.com.
Lahiji: How many students have used your services since the inception?
Mr. Doody: Over 100,000 students.
Lahiji: Geographically, how many states does College Partnership serve?
Mr. Doody: We serve student and families in all 50 states.
Lahiji: How come the company has been losing money in the past few quarters? What's the main reason behind it?
Mr. Doody: We have invested heavily in the future of the company by expanding our direct mail marketing and developing new delivery channels for our products and services, such as call centers, online ordering and marketing the product as a corporate benefit.
Lahiji: Do you expect to return to consistent profitability? What are your largest costs?
Mr. Doody: We expect to be profitable in calendar 2005. Our largest costs are marketing our direct mail.
Lahiji: How much debt do you guys currently carry? It has increased since the last time I advocated the company.
|Acquisition Related|| $1,605|
|Finance Co.|| 1,775|
Lahiji: It's amazing how many insiders have bought the company in the past year. What do you think the company is personally worth?
Mr. Doody: An independent appraised value of the company was performed in 2003 showing the Company to be worth $1.40 per share.
Lahiji: Exactly what percentage of the company is currently owned by insiders?
Mr. Doody: Over 50 per cent.
Lahiji: Finally, the education market has been very hot of late. Do you ever think that it's going to slow down?
Mr. Doody: The cost of a college degree is outpacing the cost of health care. The number of high school students seeking a college degree continues to rise as new college openings diminish.
END OF INTERVIEW.
As long as people think that higher education is important and vital to your success in life, CGPA will continue to provide its services and benefit shareholders. College is no longer just educational; it's big business.
College Partnership, in my opinion, has spent the last year positioning itself for explosive growth and I believe they will be back in the black.
I do not see absolutely any shortage for CGPA's product line for years to come. Parents want to make the most educated decision they can for their children.
With insiders buying over 1,000,000 shares in the last year, I think they know something we don't.
I have a .40 cent price target in the next 12-16 months, and they will move even higher once this gem gets discovered.
Chris Lahiji will be available to take your questions until Monday, October 11. Please use the form below to submit your questions.