The Student Loan Corp. through a trust agreement with Citibank, originates, holds, and services student loans. The loans are primarily made in accordance with the Federally sponsored guaranteed student loan programs. For the FY ended 12/31/00, interest income rose 52% to $1.09B. Net income rose 17% to $104.9M. Results reflect growth in average loans outstanding, partially offset by lower net interest margin and higher external loan servicing charges.

May 10, 2001

Shares of Student Loan Corp. broke out in February after two years of consolidation in the $40-$55 range. The stock hit an all-time high of $79.60 in front of the earnings announcement on April 19th. STU sold off following the earning report, hitting a relative low of $64.90 on Tuesday. The stock is just beginning to recover, and we believe that it could continue to move higher as the interest rate environment becomes more favorable. We are also looking for a possible split announcement out of the Annual Meeting on May 16th, or with the July earnings release. STU already has enough shares for a split, with 50 million shares authorized and 20 million shares issued. Going forward, support is Thursday’s intra-day low of $67.15 with additional support at $66.60, Tuesday’s intra-day high. Resistance is Monday’s intra-day high of $68.98 and then the 10-dma at $69.65. The company is paying a dividend of $0.70 that will be reflected on Friday. However, the PPI number on Friday morning could override the effects of the dividend payment. Look for entry points on a bounce off of $67.15 or a move above $68.98 on volume greater than 15,000 shares by noon. A note of caution: daily volume is extremely light on STU, so this play carries a bit more risk due to the lack of liquidity. We plan to use tight stops at $65 as downside protection.

Picked on May 10th @ $68.20
Change since picked +0.00
Stop Loss @ $65.00

May 17, 2001

Someone wanted to get out of Student Loan Corp, on Thursday afternoon. The stock was trading above the $70 mark for most of the session, hitting an intra-day high of $70.40 in the morning. Then, the STU started to slide just after 2 PM EDT when it slipped below $70. Shares of STU closed the day at $68.24 on volume of 22,500 shares with almost half of the volume coming in the last 90 minutes. The company held its Annual Meeting on Wednesday, but we did not get a split announcement. For now, support is the 10-dma at $68.15 with additional support at $68.00, Thursday’s intra-day low. Resistance is now up to Thursday’s intra-day high of $70.40 and then $71 or $72. Look for entry points on a bounce off of $68.15 or a move above $70.40 on volume of at least 15,000 shares by noon. Our stops are now up to $68 to limit potential losses.

Picked on May 10th @ $68.20
Change since picked +0.04
Stop Loss @ $68.00

May 15, 2001

The Student Loan Corporation broke its downward trend in anticipation of a rate cut from the Fed. On Tuesday, shares of STU hit an intra-day high of $69.48 before pulling back to close at $69.15 on volume of 8,800 shares. STU closed above the 10-dma for the first time since April 26th and the MACD is starting to turn around. The stock has now made five consecutive higher highs coupled with higher lows, so STU could continue to move higher as we approach the Annual Meeting on May 16th. From a technical standpoint, support is the 10-dma at $68.31 with stronger support at Monday’s intra-day low of $67.75. Resistance is the May 3rd intra-day high of $69.95 and then the 20-dma at $71.43. Consider entry points on a bounce off of $68.31 or a move above $69.95 on volume greater than 15,000 shares by noon. We are keeping our stops at $65 to limit potential losses.

Picked on May 10th @ $68.20
Change since picked +0.95
Stop Loss @ $65.00

May 13, 2001

The Student Loan Corporation held up relatively well on Friday considering that the stock is now reflecting the $0.70 dividend payment. Shares of STU hit an intra-day high of $68.77 before pulling back to close at $67.65 on volume of 12,200 shares. The stock has made three consecutive higher highs on top of higher lows and STU is starting to form a short-term upward trend as we approach the Annual Meeting on May 16th. We are looking for a split announcement out of the meeting. Until then, support is holding steady at Thursday’s intra-day low of $67.15 with stronger support at $66.60, Tuesday’s intra-day high. Resistance is the 10-dma at $68.97 and then the May 3rd intra-day high of $69.95. A bounce off of $67.15 or a move above $68.97 on midday volume of at least 15,000 shares may be possible entry points. Our stops remain at $65.

Picked on May 10th @ $68.20
Change since picked –0.55
Stop Loss @ $65.00