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Why Centennial Resource Development, Oceaneering International, and SunPower All Lost Ground This Week



What happened

At roughly 2 p.m. EDT on Thursday, shares of U.S exploration and production company Centennial Resource Development (NASDAQ:CDEV) had hit a nadir of around 16% for the week. Following a little behind was energy services name Oceaneering International (NYSE:OII), which was down as much as 12% at its worst point in the week. But “beating” them both on the downside was solar panel maker SunPower (NASDAQ:SPWR). The stock’s low for the week was a decline of just over 17%. There is a lot to take in here.

So what

Starting with oil, the big story in the energy sector this week has been the difficult negotiations at OPEC. The industry group has been talking since last week about increasing output in an attempt to keep supply and demand in check. Members broadly agree that an output increase is needed, given the continued improvement in demand following the 2020 pandemic-driven economic downturn. However, some within the group want to see their specific production levels increased relative to their previous levels and peers. While an agreement looks close to being hammered out, the internal tension isn’t likely to be over.

This is notable for Centennial and Oceaneering. The last time OPEC had a falling out in early 2020, production was ramped up in a wild grab for market share. That, in conjunction with the pandemic, led to a dramatic plunge in oil prices. So the uncertainty surrounding OPEC’s production levels today has investors jittery and oil prices have been volatile. As a driller, Centennial’s top and bottom lines are directly impacted by energy price moves, so weak energy prices of late have pushed the stock lower. Oceaneering could see a second-order impact, with the prospect of lower oil prices leading to fears of weak demand for the company’s services.

A person visibly upset with computer screens with stock charts on them in the background.

Image source: Getty Images.

Centennial and Oceaneering tend to be volatile names in the energy patch, making them both most appropriate for more aggressive investors. Conservative types should probably stick to larger, more diversified names like Chevron or ExxonMobil.

SPWR Chart

SPWR data by YCharts

SunPower is a little harder to read. The solar panel and services company saw a massive drop in its share price on July 14. That day’s news, however, was something that seemed positive — the company has been selected by Woodside Homes to supply solar systems to the homebuilder in Northern California. However, the day before, Credit Suisse started coverage of SunPower with an underperform rating and set a $22 target price on the stock. That’s below where the shares are trading, even after the stock price declines so far this week. And, today, Piper Sandler lowered its price target from $28 to $26. Investors don’t like downbeat news from analysts, and the Credit Suisse call was notably negative. SunPower’s stock has had a pretty good run over the past year (it’s up around 260%), so investors taking some profits in the face of analyst concerns isn’t surprising. That’s doubly true given that SunPower’s gain has handily outdistanced the average solar power stock, using Invesco Solar ETF as a proxy (this exchange-traded fund has gained around 90% of the past year). 

It’s also worth noting that the broader solar sector has been in a downtrend since mid-January after a strong early-year run-up. So mercurial investors could be looking for reasons to sell, as well. For conservative types, a potential shift here could be to a utility name with large exposure to renewable power, like a NextEra Energy, or TotalEnergies, which has been a major shareholder in SunPower for many years and is using its diversified oil business as a foundation for expansion into clean energy.

Now what

Uncertainty is high right now on Wall Street and investors are jittery. Swift and dramatic moves, even outside Reddit-driven stocks, are pretty common. All it takes is a little bad news and investors will drop a stock like yesterday’s garbage. It is not an easy time to be an investor and caution is probably in order. It’s why conservative and even moderate types might want to skip names like Centennial, Oceaneering, and SunPower and, instead, look at larger, more diversified names in the broader energy sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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