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Financial education and tools portal gets a look from the SEC.

Investools (NASDAQ: SWIM, Bullboard) provides education tools and research for investors who tend to do their own trading. The company trades at just over $8, which puts it toward the low end of its $18.23/$6.90 52-week range.

Investools claims that April was a good month. The firm opened 10,050 new accounts during April and hosted an average of 48,400 trades a day, more than double last year.

What might be an attractive business is being undermined by an "informal" SEC look into some of the company’s statements at its education seminars. If the investigation is ratcheted up, it's real trouble. If it is dropped the shares could rally. Two brokerages downgraded the stock on the news.

Investools itself is doing quite well. In the first quarter revenue was up 39% to $91 million. The company had net income of $12 million for the period up from a net loss of almost $20 million in the year ago period.

The firm could do very well, but investors have to watch two things. The first is whether the SEC news gets worse and the other is if an economic downturn or stock market drop hurts the company's financial education business.

ABOUT THE AUTHOR
From the news desk of 24/7 Wall St.

This report was prepared by 24/7 Wall St., LLC exclusively for Stockhouse. 

 
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Comments
I doubt the investigation would be anything serious. Its probably quite standard for these additional educations to be monitor and looked over if they are cheating off people or not. Hmm from an economic down turn, it may even do better? Maybe it would attract college students away from college? Thats just a long shot idea.
I think this company has a pretty bright future if the SEC investigation passes harmlessly. I think it may be a little pointless, however, to state that a stock market drop will hurt this company's share price, because stock market drops tend to hurt any company's share price (granted this business is financial education).
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