Value
3.5/10data confidence 33%| Component | Sub-score |
|---|---|
| P/E | 3.7 |
| PEG | 3.4 |
- ▸PEG: 3.45
SLMBP · Why this verdict
Why SLM Corporation - Floating Rate (SLMBP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.8/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The preferred share price of $74.99 is above the resistance take-profit level of $73.58, with negative upside of 1.9%, meaning investors entering at current prices are above fair value on a near-term technical basis with limited capital return potential. Targets | Price pulls back below $72, creating at least 4% downside from current levels to establish a more attractive entry point. | →Stable |
| CounterFor income-focused investors, the yield may justify holding above the technical resistance level if the dividend stream continues uninterrupted regardless of price fluctuation. | ||
The underlying issuer earns a 31% return on equity with 45% net margins and a strong current ratio of 4.9 times, providing solid corporate credit support for the preferred shares, which rank senior to the common equity in the capital structure. Quality breakdown | SLM Corporation's core earnings coverage of the preferred dividend remains above 5 times over the next 12 months, confirming the credit foundation remains intact. | →Stable |
| CounterPreferred holders benefit from priority claims but not from earnings upside; if the company's credit quality deteriorates due to rising student loan charge-offs, preferred holders face both credit risk and liquidity risk simultaneously. | ||
The underlying issuer is concentrated in private education loans, a single product category with structural regulatory and credit cycle sensitivity, which represents the primary risk to the preferred's income stream if the loan portfolio deteriorates materially. Risk breakdown | Net charge-off rates on the private loan portfolio remain below 3% annually, maintaining the corporate credit quality that underpins the preferred. | →Stable |
| CounterPreferred shares carry priority claim ahead of common equity holders; even in a moderate credit deterioration scenario, the preferred dividend would be maintained as long as the company remains solvent. | ||
The dividend coverage ratio is 796%, meaning the company's earnings cover the preferred dividend nearly 8 times over, suggesting the preferred income stream is extremely well-protected by current earnings levels. Catalyst breakdown | Dividend coverage ratio remains above 400% over the next 12 months, providing a wide buffer against earnings deterioration. | →Stable |
| CounterAn excessively high coverage ratio may indicate the preferred is an inefficient use of capital from the issuer's perspective; the company could elect to call or restructure the preferred at any point. | ||
The preferred share price of $74.99 is above the resistance take-profit level of $73.58, with negative upside of 1.9%, meaning investors entering at current prices are above fair value on a near-term technical basis with limited capital return potential.
→StableTargets
- Expectation
- Price pulls back below $72, creating at least 4% downside from current levels to establish a more attractive entry point.
CounterFor income-focused investors, the yield may justify holding above the technical resistance level if the dividend stream continues uninterrupted regardless of price fluctuation.
The underlying issuer earns a 31% return on equity with 45% net margins and a strong current ratio of 4.9 times, providing solid corporate credit support for the preferred shares, which rank senior to the common equity in the capital structure.
→StableQuality breakdown
- Expectation
- SLM Corporation's core earnings coverage of the preferred dividend remains above 5 times over the next 12 months, confirming the credit foundation remains intact.
CounterPreferred holders benefit from priority claims but not from earnings upside; if the company's credit quality deteriorates due to rising student loan charge-offs, preferred holders face both credit risk and liquidity risk simultaneously.
The underlying issuer is concentrated in private education loans, a single product category with structural regulatory and credit cycle sensitivity, which represents the primary risk to the preferred's income stream if the loan portfolio deteriorates materially.
→StableRisk breakdown
- Expectation
- Net charge-off rates on the private loan portfolio remain below 3% annually, maintaining the corporate credit quality that underpins the preferred.
CounterPreferred shares carry priority claim ahead of common equity holders; even in a moderate credit deterioration scenario, the preferred dividend would be maintained as long as the company remains solvent.
The dividend coverage ratio is 796%, meaning the company's earnings cover the preferred dividend nearly 8 times over, suggesting the preferred income stream is extremely well-protected by current earnings levels.
→StableCatalyst breakdown
- Expectation
- Dividend coverage ratio remains above 400% over the next 12 months, providing a wide buffer against earnings deterioration.
CounterAn excessively high coverage ratio may indicate the preferred is an inefficient use of capital from the issuer's perspective; the company could elect to call or restructure the preferred at any point.
TrendMatrix Research · core thesis
Engine thesis — one sentence
SLM Corporation's floating rate preferred shares deliver the same underlying corporate credit quality as the common — 31% return on equity, 45% net margins — but trade above intrinsic value with negative upside to resistance and an exceptionally high dividend coverage ratio of 796%, suggesting the preferred is priced for income safety rather than capital appreciation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 1.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.9 |
| Moat | 6.4 |
| Piotroski F | 4.4 |
- ▸Excellent ROE: 31%
- ▸Strong margins: 45%
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
| EPS growth | 4.0 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.5 |
| MACD | 0.9 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Uptrend pullback (RSI 30) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 7.8 |
| growth rank | 2.3 |
- ▸Best-in-class margins
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.1 |
| support resistance | 3.9 |
| 52w position | 9.3 |
| gap | 6.0 |
Risk (lower is worse)
7.1/10data confidence 80%| Component | Sub-score |
|---|---|
| days to cover | 8.5 |
| volatility | 10.0 |
| beta | 7.3 |
| debt equity | 2.5 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| dividend safety | 5.5 |
- ▸Dividend: 804.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.3<4.5
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.3<4.5) reinforce the read. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.2, Technical at 7.1, and Risk (lower is worse) at 7.1; the weakest are Momentum at 3.3, Growth at 3.5, and Value at 3.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Corporate Credit
Trip ifReturn on equity at the corporate level falls below 15% in any annual reporting period.
- P2Dividend Coverage Very High
Trip ifDividend coverage ratio falls below 300%, suggesting more than half the safety cushion has eroded.
- P3Overvalued Above Resistance
Trip ifPreferred share price rises above $77, more than 2.7% above the current price of $74.99, compressing the yield further.
- P4Concentration Loan Portfolio Risk
Trip ifCorporate net charge-off rate on the loan portfolio exceeds 3.5% in any reported quarter.