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Omega Advisors adds nearly 10% stake in Aspen Group

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Omega’s 13G filings since October

Omega Advisors added to its position in Atlas Energy LP (ATLS) and Altisource Portfolio Solutions (ASPS). It disclosed stakes in Aspen Group (ASPU), Resource America, Inc. (REXI), and Arbor Realty Trust, Inc. (ABR). It trimmed positions in Chimera Investment Corporation (CIM), SandRidge Energy, Inc. (SD), and Harbinger Group (HRG).

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Omega Advisors and Aspen Group

Leon Cooperman’s Omega Advisors added a position in Aspen Group (ASPU). A 13G amendment on January 26 disclosed a 9.99% stake with 11,238,939 shares.

Aspen’s $5.4-million private placement announcement in September last year said that an offering was led by Sophrosyne Capital and Charlestown Capital Advisors. It also announced new investors, including Omega Advisors’ Leon G. Cooperman, Global Undervalued Securities Master Fund LP, Taurus Capital Partners LLC, and Dillon Hill Capital.

Overview of Aspen Group

Aspen Group (ASPU) is an online post-secondary education company that aims to provide a high-quality, responsibly-priced, distance-learning education. The company believes that one of the key differences between Aspen Group and other publicly traded, exclusively online, for-profit universities is an emphasis on post-graduate degree programs.

As of October 31, 2014, 2,811 students were enrolled as full-time, degree-seeking students with 2,391 of those students or 85% in a master or doctoral graduate degree program.

Aspen offers certificate programs and associate, bachelor, master, and doctoral degree programs in a broad range of areas, including business, education, nursing, information technology, and general studies.

In terms of enrollment, Aspen’s School of Nursing is the most popular. The school grew from 600 to 1,026 students year-over-year, which represented 67% of Aspen’s full-time, degree-seeking student body growth.

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Aspen posts 33% growth in fiscal 2Q15 revenue

Aspen Group’s (ASPU) revenue for fiscal 2Q15 increased 33% to $1,214,247 from $914,132 in the year-ago period. The increase was driven by growth in student enrollments at Aspen’s School of Nursing and nursing student class starts.

Revenues from Aspen’s nursing degree program increased 27% to $483,050 during the quarter. Aspen said its cost per new degree-seeking enrollment fell 33% year-over-year, from $808 to a low of $544, due to the achievement of an 11% lead to new enrollment conversion rate.

Aspen peer Apollo believes US higher education industry is rapidly evolving

Aspen’s online university peer group includes larger competitor Apollo Education Group, Inc. (APOL), which said in its latest 10Q that the US higher education industry is seeing rapid changes “due to technological developments, evolving needs and objectives of students and employers, economic constraints affecting educational institutions and students, price competition, increased focus on affordability and other factors.”

Apollo also talked about increasing competition in the sector from traditional public and private colleges and universities that are also enhancing their distance learning and other online education programs, especially for working learners.

Other peers of Aspen that are influenced by these changes include American Public Education, Inc. (APEI), DeVry Education Group (DV), and Grand Canyon Education Inc. (LOPE).

The next part of this series will highlight Omega Advisors’ position in Resource America, Inc. (REXI).

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