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 20, 2001

The Student Loan Corporation continued to slide on light volume during Friday’s session. The stock traded to an intra-day low of $67.01 on volume of 9,000 shares. We were stopped out at $68 so we are dropping this play.

Picked on May 10th @ $68.20
Profit/Loss = -0.20 (-1%) (Stopped out Friday @ $68.00)
Best Profit = +2.20 (+3%)