This Education Stock Suddenly Lost a Investor Amid a Nearly 70% Surge

California-based Global IMC fully exited its position in Adtalem Global Education (NYSE:ATGE) in the third quarter, a move reflecting a $6.48 million net position change, according to a November 14 SEC filing.

What Happened

According to an SEC filing on November 14, Global IMC LLC sold all its 50,933 shares of Adtalem Global Education (NYSE:ATGE) during the third quarter. The estimated value of the trade was nearly $6.5 million based on the quarterly average price.

What Else to Know

Global IMC's Adtalem stake had accounted for 1.7% of the fund’s assets in the previous quarter.

Top holdings after the filing:

• NYSE: KGC: $3.76 million (15.9% of AUM)
• NYSE: HBM: $3.54 million (15.0% of AUM)
• NASDAQ: TSEM: $3.45 million (14.6% of AUM)
• NASDAQ: IREN: $3.45 million (14.6% of AUM)
• NYSE: EGO: $3.33 million (14.1% of AUM)

As of Friday, shares of Adtalem were priced at $100.60, up about 14% in the past year and only slightly underperforming the S&P 500's roughly 16.5% gain in the same period.

Company Overview

Company Snapshot

• Adtalem Global Education provides postsecondary education and workforce solutions through Chamberlain University, Walden University, and medical/veterinary schools, with offerings in nursing, health professions, medical, veterinary, and online degree programs.
• The company generates revenue primarily from tuition and fees for degree and non-degree programs, leveraging a multi-segment approach that includes both on-campus and online education services.
• It serves students seeking professional degrees in healthcare, education, business, and public service, with a focus on working adults and individuals pursuing advanced credentials.

Adtalem Global Education Inc. is a leading provider of workforce-focused education, operating across nursing, health professions, and medical and veterinary segments. The company leverages a diversified platform of institutions to address demand for skilled professionals in critical fields. Its scale and multi-modal delivery position it to serve a broad base of students and adapt to evolving industry needs.

Foolish Take

This stock had surged nearly 70% earlier in the year before rolling over sharply, and the exit appears to have landed right as sentiment shifted from enthusiasm to scrutiny. In a portfolio where the largest holdings each command more than 14% of assets, a 1.7% position was never a cornerstone. That makes it easier to walk away once the narrative turns.

In its latest quarter, Adtalem Global Education reported revenue of $462.3 million, up 10.8% year over year, while adjusted EPS climbed 35.7% to $1.75. Total enrollment rose 8%, extending a multi-quarter growth streak across Chamberlain and Walden, and adjusted EBITDA increased nearly 16% to $112 million. Nevertheless, shares crashed following the release amid concerns of lighter-than-anticipated growth and broader market concerns. The takeaway is uncomfortable but useful. Strong fundamentals do not guarantee a smooth stock, and when growth expectations reset, even good numbers can stop being enough.

Glossary

Exited position: When an investor sells all holdings in a particular security or company.
Net position change: The total increase or decrease in the value of an investment position after a transaction.
Exposure: The amount of money invested in a particular asset, sector, or market, indicating risk level.
AUM (Assets Under Management): The total market value of investments managed by a fund or investment firm.
13F filing: A quarterly report filed by institutional investment managers to disclose their equity holdings.
Stake: The ownership interest or share an investor holds in a company or fund.
Quarter over quarter: A comparison of financial or operational results from one fiscal quarter to the next.
Liquidation: The process of closing a fund or business by selling assets to return cash to investors.
Multi-segment approach: A business strategy that operates across multiple distinct divisions or markets.
Multi-modal delivery: Offering products or services through various methods, such as online and in-person formats.
Workforce solutions: Services or programs designed to train or place individuals in jobs, often focused on specific industries.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adtalem Global Education. The Motley Fool has a disclosure policy.