cramer

Very undervalued, people are paying their student loans, more people are going to college every year

These companies, not unlike Sallie Mae (SLM) and the Apollo (APOL) / Strayer (STRA) contingent are all in Obama's cross hairs. These are companies that are viewed at best as friction and a tax on the system and at worse, actual taxpayer rip-offs.

Solid

Sallie Mae (SLM) shares were also sliding after CEO Albert Lord told a conference Wednesday that while loan losses are expected to peak in 2009, charge-offs are likely to stay high. Read more here.

WTF? Sallie Mae - Save or Slaughter: Debra Borchardt points out the inconsistencies in the government's behavior to student lender Sallie Mae. Click here to watch the video.

Outperform - Price 11.45 on Feb. 3
by Keefe, Bruyette & Woods

Target: 18. [Education financier] Sallie Mae said it reached agreement with its bank lenders to extend the maturity of its outstanding $26 billion [asset-backed commercial paper] facility...for 60 days. We are lowering our '09 EPS to $1.12 from $1.20 to incorporate the incremental costs. Market cap: $5.3 billion.

Q: Any financials look interesting?

Cooperman: One is Sallie Mae [SLM]. Probably 95% of its loans are government-guaranteed and the stock sells at 10 times earnings. A year ago, a private-equity firm wanted to buy Sallie for 60 bucks. You can buy it now at 18.

Sallie Mae (SLM) was downgraded to Underweight, Morgan Stanley said. $13 price target. Estimates also cut, as earnings will be hit by both lower government subsidies and the current credit crunch.

Big Money in Distressed Stocks, but Also Danger
Fortunes are made on Wall Street buying distressed securities at the right time, but that doesn't mean you should jump in with both feet. Jonathan Katz, managing member at Panagos Katz, offers a few tips.

Click here to watch the video.

same reason

hubris power of 2

"Three big deals that still look dicey are SLM (SLM), the student lender; Tribune (TRB), the newspaper and TV company, and Harmon International (HAR), a maker of audio products."