Shares of DeVry Inc., which operates for-profit education institutions, fell Monday after it said federal investigators are seeking documents in a probe of the company's recruiter compensation and evaluation practices.
Even though analysts said they were not particularly concerned about the probe and the company vowed to cooperate, shares dropped $1.47, or 2.6 percent, to $55.21 in afternoon trading.
Earlier this month, DeVry said the Department of Justice asked it voluntarily to furnish documents and other information regarding its policies and practices on recruiter compensation and performance evaluation.
"The request was made in order to examine allegations that DeVry may have submitted or caused the submission of false claims or false statements to the U.S. Department of Education," DeVry said in a statement.
The company said "it will cooperate fully with the inquiry and furnish the requested information and documents."
Department of Education guidelines prohibit companies from rewarding student recruiters based directly on the number of students they enroll.
Robert W. Baird & Co. analyst Amy Junker, who has an "Overweight" rating on the stock and a $70 price target, said the probe might even be good news for investors.
"We believe this is likely a routine investigation and we would be buyers on any weakness in the stock."
DeVry is the parent of DeVry University, Advanced Academics, Ross University, Chamberlain College of Nursing and Becker Professional Review.