SLM Corporation (SLM) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

SLM Corporation (NASDAQ: SLM) stock fell -0.26% on Wednesday to $15.32 against a previous-day closing price of $15.36. With 2.79 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.86 million shares. During the session, the Credit Services company that operates in wider Financial sector, reached to the highest price of $15.60 whereas the lowest price it dropped to was $15.22. The 52-week range on SLM shows that it touched its highest point at $20.17 and its lowest point at $10.81 during that stretch. It currently has a 1-year price target of $18.17. With its current market cap of 3.81 billion, SLM has annualized dividend of $0.44 while the current yield stands at 2.87%. Beta for the stock currently stands at 1.22.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SLM was down-trending over the past week, with a drop of -0.45%, but this was up by 6.32% over a month. Three-month performance surged to 5.95% while six-month performance fell -8.04%. The stock lost -15.22% in the past year, while it has lost -7.71% so far this year. A look at the trailing 12-month EPS for SLM yields 1.72 with Next year EPS estimates of 2.80. For the next quarter, that number is 1.14. This implies an EPS growth rate of -51.30% for this year and 6.47% for next year. EPS is expected to grow by 29.58% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 21.80%.

Float and Shares Shorts:

At present, 241.50 million SLM shares are outstanding with a float of 238.68 million shares on hand for trading. On May 14, 2023, short shares totaled 7.08 million, which was 2.92% higher than short shares on Apr 13, 2023. In addition to Mr. Jonathan W. Witter as the firm’s CEO & Director, Mr. Steven J. McGarry serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 95.11% of SLM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.92% of SLM, in contrast to 55.54% held by mutual funds. Shares owned by individuals account for 43.44%. As the largest shareholder in SLM with 12.63% of the stake, The Vanguard Group, Inc. holds 30,598,656 shares worth 30,598,656. A second-largest stockholder of SLM, Impactive Capital LP, holds 23,544,180 shares, controlling over 9.72% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SLM, holding 19,475,632 shares or 8.04% stake. With a 3.10% stake in SLM, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 7,511,105 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 3.08% of SLM stock, is the second-largest Mutual Fund holder. It holds 7,452,592 shares valued at 111.94 million. MFS Mid Cap Value Fund holds 3.06% of the stake in SLM, owning 7,406,953 shares worth 111.25 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SLM since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With SLM analysts setting a high price target of $20.00 and a low target of $15.00, the average target price over the next 12 months is $18.08. Based on these targets, SLM could surge 30.55% to reach the target high and fall by -2.09% to reach the target low. Reaching the average price target will result in a growth of 18.02% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Dividends & Yield:

In terms of dividends, SLM has a current ratio of $0.44, which is $0.44 over the trailing 12-months, while a dividend of $0.19 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and SLM currently yields $2.87. In the past year, SLM’s dividend yield has been $2.87, but when looking at the stock over the past five years, its yield has been $1.39. Accordingly, SLM has a current buyback yield of $14.75. This was $14.75 for the TTM.

Summary of Insider Activity:

Insiders traded SLM stock several times over the past three months with 2 Buys and 0 Sells. In these transactions, 4,270 shares were bought while 0 shares were sold. The number of buy transactions has increased to 33 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 1,096,410 while 298,293 shares were sold.

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