Jim Cramer is loved and hated by many on both sides, but despite the hype he makes and gets accused of he rarely calls for a stock to double. That is what we just heard him do today on SLM Corp. (NYSE: SLM). This is the former Sallie Mae government sponsored entity, and what Cramer was basically getting at was that the company will not be killed in the retooling of the education loans. He thinks it is prime at collecting and processing these loans, and he also noted how most universities are not in support of the government being in charge of all of the student loans. Depending upon when you started looking at this one versus when he did, this call may really represent a triple or even more.
Cramer touted this one this afternoon on the STOP TRADING segment on CNBC and he called it the speculative stock of the year on Friday.
William Blair has also noted that evening a modified model would allow it to service loans for the Department of Education.
We started covering this one with a chicken-bull strategy for our “10 Stocks Under $10″ subscriber newsletter on March 1, 2009, but in that same subscriber letter we essentially gave it the green light with an options strategy back on April 26, 2009 when shares were $4.84. We just reiterated the upside last week after closing at $6.61 the Friday before at the end of May. After today’s 20% gain, this stock has crossed above the $8.00 mark.
If Cramer wants to wait for a double from here, he is welcome to. We plan to revisit this one when it gets to $9.00 or $10.00 per share. At that level, our own double for some and close enough for others will have been realized. His double might really be a triple for those who started playing this around the time the company announced a huge jobs repatriation.
Jon C. Ogg
June 8, 2009