After seeing the market be able to battle through issues like the bank probing and questions of the Fed, I am much more confident in the ability for us to hit 11,500 before moving back to 10,500. Today, the market once again looks poised for 
a great day. Retail sales came out higher than expected, which should have been expected after the sales we saw in September from all the stores that were better than expected. Additionally, Fed Chairman Ben Bernanke is injecting optimism into the market with his comments that the Fed will rejuvenate the economy by buying more Treasury Bills.
Additionally, our Overnight Trade in Webster Financial looks as though it should be a good one. The company reported earnings of 0.22 per share vs. the expected 0.17. The company had a very upbeat commentary, and they saw their bad loan provision drop 22%. The company saw its net interest margin increase nine basis points as well. The stock does not trade in pre-market, but I will be looking to sell at the open.
After yet another day of more positive earnings, putting the week’s total at 32/36 companies that met or beat expetations, I am fairly confident we can position ourselves into something a bit more long term with some growth potential.
Got to love this chart above…
Midterm Trade of the Day: Sallie Mae Inc. (SLM)
Analysis: Perhaps I feel a bit inclined to this company because over the next few years I will be paying them thousands of dollars. Yet, of the Mae/Mac family, Sallie Mae has seemed to be the most successful at regaining its ability to turn loans into profits and remaining afloat. The company is set to release their Q3 2010 earnings on Tuesday night, and they are expecting an EPS of 0.27 vs. one year ago’s 0.26. Moving into earnings, however, the company appears quite undervalued and nearing a bottom.
Currently, Sallie Mae holds a P/E ratio of 5.96. This is an extremely low ratio that shows very little market confidence in the company. Yet, at the same time, the market does not hold the company to high standards on earnings. A small beat or even belief that even a 0.01 or 0.02 beat was possible would do wonders for the stock price. The industry average P/E ratio is 14.7, which puts SLM well below the average. The company is hurt by its parental figures now traded…
