Trade-Ideas LLC identified

SLM

(

SLM

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) 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 $24.5 million.
  • SLM has traded 125,083 shares today.
  • SLM traded in a range 224.4% of the normal price range with a price range of $0.63.
  • SLM traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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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 13. Currently there are 5 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 3.7 million shares per day over the past 30 days. SLM has a market cap of $2.3 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.98 and a short float of 6.6% with 5.38 days to cover. Shares are down 17.5% 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

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SLM is still more expensive than most of the other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Consumer Finance industry. The net income has significantly decreased by 44.9% when compared to the same quarter one year ago, falling from $82.93 million to $45.72 million.
  • Net operating cash flow has significantly decreased to -$44.94 million or 606.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for SLM CORP is currently lower than what is desirable, coming in at 29.40%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 21.88% is above that of the industry average.
  • SLM CORP's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.58 versus $0.41).

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