Apollo (APOL) - Potential Turnaround

I ran into a good stock-pick article containing value/contrarian Jeff Auxier's opinions. In the article, Jeff mentions that he is currently buying Walmart (WMT), Western Union (WU) and Apollo (APOL). Walmart has been coming up in a lot of value discussions ever since Warren Buffet bought into it. Western Union was spun from First Data Corp. and certainly has promise. However, the stock that caught my eye was Apollo.

Apollo runs a number of universities and online education programs for working adults looking to upgrade their education. A former dynamite growth story, it has ran into hard times of late. Enrollment growth has dramatically fallen to ~5% a year, advertising expenditures are far exceeding that level and there have been investigations into stock option grants (who hasn't had these stock option problems lately?) which have resulted in an upper management shakeout. The stock currently trades for roughly half it's 52-week high with a P/E of 14.9.

Jeff's main argument is that Apollo is an industry leader hitting a cyclical downturn. The numbers would generally seem to confirm it's spot in the industry. The company sports profit margins of 17.7% and ROE of 62.97%. There is virtually no long-term debt. Most of it's competitors are also hitting hard times.

The company also may provide certain recession counter-cylicality. In effect, as the economy worsens (if it worsens) jobs become scarcer and people get layed off. Looking for new or better jobs people return to school in greater numbers and companies like Apollo benefit.

At this point I am still investigating the stock. I need to convince myself that the drop in growth rates is actually going to turn around at some point. For those who need fewer reassurances or have more insight into the company this could be a good buying opportunity.

Obviously, I would love to get some feedback on Apollo.