Sallie Mae Plus 3 Boosted by New Contracts

By Jon "DRJ" Najarian

The biggest provider of U.S. student loans, Sallie Mae (SLM), and three other companies won contracts to service $550 billion in loans owned by the Education Department. Nelnet (NNI), Great Lakes Education Loan Services, and AES/PHEAA also won servicing contracts. SLM closed at $7.69 yesterday but was up more than $1 at $8.78 in the pre-market and is at $7.90 mid-afternoon.

(Chart courtesy of tradeMONSTER)

Comments

[mikemichaelson:]

NNI is the better pick here. It is more stable in terms of earnings and this new servicing contract could significantly increase earnings going forward. Earnings estimates will have to increase to at least $1.80 for 2010 and this should be trading at at least 10 times those earnings.

Jun 19 10:23 AM