Nelnet (NYSE: NNI)
Company: Nelnet Market Cap: 2.87B P/E: 8.2x (LTM) / 11.3x (NTM) Share Price: ~$74 Tangible Book/Share: $63 Brief History: Nelnet is a company formed in Nebraska in 1978 to service federal student loans for two local banks. Since then, the company quickly grew to become a leading originator and servicer of student loans, primarily of those that originated under the Federal Family Education Loan Program (FFELP). Starting in 1965, FFELP was a system under which loans originated by banks and other private lenders were guaranteed by the US federal government. However, the Reconciliation Act of 2010 discontinued the creation of new loans by private lenders and shifted all future originations to the Department of Education (DOE) under the Direct Loan program, effective July 2010. This meant that Nelnet’s legacy business of originating FFELP loans came under threat. Since then, the company's survival mechanism has been to acquire portfolios of FFELP loans (~$28billion to date) from various