A finance company which profiles and provides students with funds for higher education using a blend of current market credit practices as well as its own proprietary analytic models and decision tools.
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After poking around in the subprime market, I took a look at this dog. A student aid lender, UNCL claims to have a methodology that will beat Sallie Mae, First Marblehead and others to the punch.
It appears that their loans are more expensive, so that will eventual undo them. Their CEO previously headed eLottery, which had a history of shennanigans.
Looking at their financials, they aren't even turning a positive gross profit. Their balance sheet looks like dog doo. Their methodology won't prove itself for years -- until the first students actually start paying back their loans. In the meantime, UNCL is out some serious dough.
My underperform is based on the fact that UNCL won't be able to hold on for the years it will take for their "matrix" to prove itself.
As if that weren't enough, the market is already skittish enough about the subprime story. With only 15% institutional ownership, how long will they hold on? My guess is not very long. So who's going to buy those shares? Not me.
This one has the potential to go all the way to zilch. Zip. Nada.