South African Stocks Show Life After an Election and Power-Grid Fixes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 11 2024
0mins
Source: Barron's
- Investor Sentiment in South Africa: Global investors are closely watching political developments in South Africa, particularly the coalition between the African National Congress and the Democratic Alliance. Positive changes in governance and reduced corruption are boosting confidence.
- Economic Outlook for South Africa: Despite challenges like high unemployment and crime rates, there is optimism among investors for economic growth in South Africa. Improvements in infrastructure, visa policies, and potential reforms are seen as positive signs for the country's economy.
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Analyst Views on SLM
Wall Street analysts forecast SLM stock price to rise
11 Analyst Rating
7 Buy
2 Hold
2 Sell
Moderate Buy
Current: 22.510
Low
23.00
Averages
31.09
High
37.00
Current: 22.510
Low
23.00
Averages
31.09
High
37.00
About SLM
SLM Corporation is a holding company, which operates through various subsidiaries and is a financial brand for higher education. The Company’s primary business is to originate and service loans it makes to students and their families to finance the cost of their education. It also offers a range of deposit products insured by the Federal Deposit Insurance Corporation. Its primary private education loan product is the Smart Option Student Loan, which emphasizes in-school payment features that can produce shorter terms and reduce customers’ total finance charges. The Smart Option Student Loan generally runs for six months after the borrower separates from school but can run for up to 36 months for a small subset of graduate loans. It also offers six loan products for specific graduate programs of study. These include the Sallie Mae Law School Loan, the Sallie Mae MBA Loan, the Sallie Mae Graduate School Loan for Health Professions, the Sallie Mae Medical School Loan, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Positive Financial Planning Trends: The survey indicates that 64% of families have developed a plan to finance higher education, up from 54% in 2020, and 60% have set aside savings, with an average of $42,307, reflecting a proactive approach to educational investment.
- More Preparatory Actions Taken: 85% of families have taken steps to prepare for higher education, an increase from 77% in 2020; however, only 38% have discussed key outcomes like expected salaries, highlighting a gap in informed decision-making in education planning.
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See More
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See More
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- Increased Confidence in Education Investment: The latest study reveals that 95% of high school students plan to pursue further education, with 90% of families viewing it as an investment in the student's future, and 82% believing the costs are justified, indicating a strong commitment to education.
- Positive Financial Planning Trends: The survey indicates that 64% of families have developed a plan to finance higher education, up from 54% in 2020, and 60% have set aside savings, with an average of $42,307, reflecting a proactive approach to educational investment.
- More Preparatory Actions Taken: 85% of families have taken steps to prepare for higher education, an increase from 77% in 2020; however, only 38% have discussed key outcomes like expected salaries, highlighting a gap in informed decision-making in education planning.
- Lack of Awareness About Scholarships: Among families considering higher education, 48% believe scholarships are only for exceptional students, and 37% are aware that families often pay less than the advertised price, indicating a significant knowledge gap in funding education.
See More
Three Stocks to Watch Under $50
- UCB's Growth Concerns: United Community Banks (UCB) has shown only 7.6% annual revenue growth over the past two years, which is below banking sector standards, indicating potential risks to profitability that could affect investor confidence.
- SLM's Market Challenges: Sallie Mae (SLM) has experienced flat sales over the past two years, with an annual EPS growth of only 3.1%, significantly trailing the peer group average, reflecting a lack of competitiveness in its products and services during the current market cycle.
- NRDS's Strong Performance: NerdWallet (NRDS) achieved an impressive 27.8% annual revenue growth over the past five years, and its stock buybacks propelled EPS growth to 252%, showcasing its robust competitive position and profitability in the market.
- Investment Opportunity Analysis: In the current market environment, UCB and SLM present concerning performance metrics, while NRDS demonstrates strong growth potential, prompting investors to carefully assess the investment value of these stocks.
See More
Sallie Mae Offers Guidance for College Financing Decisions
- College Selection Factors: Sallie Mae advises families to consider academic support, campus engagement, and career resources when choosing a college, alongside graduation rates and earnings by major, to facilitate smarter decision-making.
- Understanding Full Costs: The true cost of college encompasses tuition, housing, meals, books, and everyday expenses, prompting families to carefully review financial aid offers to avoid future financial surprises.
- Pursuing Free Money: Scholarships and grants can significantly reduce out-of-pocket costs, and Sallie Mae encourages students to apply early and often for various scholarships to lessen their borrowing needs.
- Smart Borrowing Strategies: After securing scholarships and federal aid, families may still face funding gaps, and Sallie Mae recommends borrowing only what is necessary to ensure financial responsibility and future success.
See More
Federal Reserve Holds Rates Steady, Some Banks Cut Yields
- Stable Rate Policy: The Federal Reserve's decision to maintain the federal funds rate between 3.5%-3.75% is generally positive for savers; however, some banks have still lowered their high-yield savings account rates, indicating competitive pressures in the market.
- Yield Cuts by Banks: According to a BTIG report, three major banks—Capital One, Synchrony, and Marcus by Goldman Sachs—have recently reduced their annual percentage yields, following a cut by Ally Financial, reflecting adjustments in banking strategies under yield pressure.
- Shifting Market Expectations: While analysts believe the Fed will not cut rates, bank earnings reports indicate robust consumer spending and lending in the U.S., suggesting that growth expectations remain intact, which could influence future rate decisions.
- Deposit Product Yield Comparison: Despite some banks lowering rates, Bread Financial and LendingClub maintain a 4% yield, but they are expected to follow suit with cuts, highlighting the ongoing competition for high-yield deposit products in the market.
See More
Sallie Mae Accused of Circumventing Data Privacy Laws
- Data Privacy Lawsuit: Christopher Gray has filed a lawsuit against SLM Corporation, alleging that it established a complex corporate structure to sell personal data of millions of students, violating federal privacy laws and affecting a large number of minors.
- Corporate Structure Design: The dual-entity structure between Sallie Mae Bank and SLM Education Services LLC allows the latter to circumvent GLBA restrictions, openly admitting to selling personal information for advertising and marketing, which could lead to legal repercussions.
- Market Impact: The Backpack Media advertising platform launched by Sallie Mae in March 2026 claims to reach 8.5 million students and families, primarily minors seeking student loans and scholarships, potentially provoking strong public backlash against its data usage practices.
- Whistleblower Protections: Gray has submitted a whistleblower complaint to the SEC, gaining protections under the Delaware Whistleblower Protection Act and Section 21F of the Securities Exchange Act, meaning any continued pressure from Sallie Mae could result in additional legal consequences.
See More
Midday Market Moves: Notable Stock Fluctuations
- Comcast Downgrade: Comcast's stock fell nearly 8% after Deutsche Bank downgraded its rating from Buy to Hold, with analysts indicating that while there is visibility into sustainable revenue and EBITDA growth, they do not expect multiple expansion, highlighting challenges in a stable but non-growing business environment.
- HCA Healthcare Decline: HCA Healthcare's stock dropped over 7% due to a milder flu season resulting in fewer patient admissions, and although the company narrowly beat analyst profit estimates, investors are concerned about declining patient demand as Affordable Care Act subsidies phase out.
- Organon Surge: Organon's stock spiked 22% following a report from The Economic Times that Sun Pharma plans to submit a $13 billion offer for the U.S.-based company, which could significantly enhance Organon's market value and investor confidence.
- Intel Earnings Beat: Intel reported first-quarter earnings of 29 cents per share on revenue of $13.58 billion, both exceeding Wall Street expectations, leading to a stock rally of over 23%, indicating a strong recovery momentum in the semiconductor market that may boost overall industry investment enthusiasm.
See More
