Investing opportunities in companies that serve K-12 students are still fairly limited. Gay thinks a few companies like these could come public in the next 12 to 18 months. Meantime, Sylvan Learning Systems, which provides a range of educational services that includes tutoring, test preparation, and training in English as a second language, focuses mainly on K-12 students. Soffen calls it the broadest stock in the education sector, meaning that it isn't overly dependent on any single student group. He also notes that Sylvan is attractively priced.
Investors can find a much wider selection of companies in higher education.
He favors Apollo, which runs the University of Phoenix and other graduate programs designed expressly for working adults. Moe of Merrill Lynch recommends Apollo and DeVry. Few of the education analysts interviewed cover companies that offer corporate training. Some say that's because it is more a business service than an education play. Moe has a favorite, however.