BUY Conviction3/5 Analysis quality75/100 now
The analyst recommends Nelnet (NNI) as a 'Berkshire-type' business with a unique asset: a portfolio of nearly $20 billion in government-backed student loans generating a slow but steady stream of cash. The investment thesis hinges on management's ability to effectively deploy this cash into new ventures like fiber-to-home and educational technology (Huddle, FACTS Management System). The current market environment is seen as favorable for acquisitions, fueling future growth.
“The secret sauce here the way this investment works is their ability to use that cash I think it's two to three billion dollars worth of cash just dripping out of that portfolio over the next decade plus.”