Trade-Ideas LLC identified

SLM

(

SLM

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified SLM as such a stock due to the following factors:

  • SLM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.0 million.
  • SLM has traded 332,423 shares today.
  • SLM is up 3.3% today.
  • SLM was down 6.6% yesterday.

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More details on SLM:

SLM Corporation, together with its subsidiaries, operates as a saving, planning, and paying for education company in the United States. The company offers private education loans to students and their families. SLM has a PE ratio of 1. Currently there are 4 analysts that rate SLM a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SLM has been 3.8 million shares per day over the past 30 days. SLM has a market cap of $2.5 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.00 and a short float of 6.7% with 6.12 days to cover. Shares are down 17.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SLM as a

sell

. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • SLM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.72%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Consumer Finance industry and the overall market, SLM CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for SLM CORP is currently lower than what is desirable, coming in at 34.61%. Regardless of SLM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SLM's net profit margin of 40.40% significantly outperformed against the industry.
  • SLM CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SLM CORP increased its bottom line by earning $0.59 versus $0.41 in the prior year. For the next year, the market is expecting a contraction of 15.3% in earnings ($0.50 versus $0.59).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 355.7% when compared to the same quarter one year prior, rising from $19.72 million to $89.85 million.

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