Dear Reader,
Usually these emails are used to detail a current position in your portfolio. Something new we want to try is sending out an update when we sell a position. Our goal is for you to gain even more insight into our portfolio management.
On Thursday, October 16 we sold two positions, Navient Corp. (NAVI) and SLM Corp. (SLM).
You may recall from
the very first AMM Dividend Letter that we bought SLM Corp. because of its upcoming corporate restructuring. The company was spinning off its student loan portfolio management business from its personal banking business. The split occurred in April of this year creating Navient Corp. (NAVI), the student loan portfolio, and SLM Corp. (SLM), the small personal banking business.
One of the major reasons for us to sell an existing position is because we see a better opportunity. Recent market activity brought Blackrock Inc. (BLK), a company we've been watching and previously owned, back down to our buy price.
Navient Corp still offers decent future total returns but it is trading at our fair value price of $18 per share. At today's prices we see a better opportunity for capital appreciation and, more importantly, dividend growth in Blackrock.
SLM Corp. is still below our fair value of $10 per share. However, SLM was a very small position after the spin-off and it did not pay a dividend post spin-off either. We usually like to hold spin-offs for at least a year but we think the opportunity in Blackrock merited the early sell.
As always, feel free to reach out to us if you would like to discuss anything further.
Sincerely,
Your Portfolio Management Team
