Seeking Alpha

GSEs shoot higher on big Bove price target

  • It doesn't take much to get these names moving, and Fannie Mae (FNMA +10.1%) and Freddie Mac (FMCC +10.3%) rocket higher, with Dick Bove appearing on Fox Business saying both are $18 stocks appearing to be today's catalyst.
  • Bove has been bullish on the companies for awhile, but the $18 price target is a new item.
  • Last week: Fannie reports big profit; Treasury paid back and more
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Comments (12)
  • lbashaw
    , contributor
    Comments (28) | Send Message
     
    not to mention the housing boom.... gse's are making tons of money....look for the govt to back off ....fairhome and pershing are winning
    26 Feb 2014, 02:52 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (9813) | Send Message
     
    The more money the GSEs make...the tighter the grip congre$$ will hold on them.

     

    The Golden Goose will not be given up easily.
    26 Feb 2014, 03:45 PM Reply Like
  • Caludio
    , contributor
    Comments (308) | Send Message
     
    To DeepValueLOver
    What you said is true but we dont need the Government to give up their share. All we need is that they stop the Sweep Amendment . They still will own 80% of the profits.
    26 Feb 2014, 05:25 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (9813) | Send Message
     
    Caludio:

     

    I don't disagree with what you wrote but the government would argue that the Sweep Agreement is part of their share.
    26 Feb 2014, 07:49 PM Reply Like
  • amateur_investor_
    , contributor
    Comments (5) | Send Message
     
    In that case they would still need to demonstrate that their actions are justified within the legal definition of a conservatorship. One also wonders how the treasury will reconcile their recently introduced "third amendment" with their original stated intention to release FNMA once profitable. That release is exactly what a conservator is sworn to. This will go to the Supreme Court and assuming the law still has any meaning or value a very large web of deceit will be exposed, and it will not be tolerated.
    27 Feb 2014, 02:38 AM Reply Like
  • philipmax
    , contributor
    Comments (336) | Send Message
     
    What we need is to demonstrate that the Feds can't confiscate private property!

     

    The stockholders own these companies not Uncle Sam. GIVE IT BACK!
    26 Feb 2014, 05:31 PM Reply Like
  • cchilder
    , contributor
    Comments (13) | Send Message
     
    Add to the mix the impact that full disclosure will have on the pending lawsuits. The fact that securities fraud was committed by the feds. Woo doggies!!! The cat's out of the bag, and it's a big 'ole TIGER!!!
    26 Feb 2014, 06:10 PM Reply Like
  • radracer1
    , contributor
    Comments (3) | Send Message
     
    I just got in FNMA this morning, im hoping for good things
    26 Feb 2014, 09:03 PM Reply Like
  • JMstocks75
    , contributor
    Comments (250) | Send Message
     
    18$ is funny, 18 then to $45-$60 in 30 days, bet your backside on that
    26 Feb 2014, 09:06 PM Reply Like
  • southbaysteve
    , contributor
    Comments (4) | Send Message
     
    My only question is when will the gov't exercise the warrants to acquire the 80% interest for next to nothing. That is going to be a big hit to the price.
    26 Feb 2014, 09:06 PM Reply Like
  • Retail Investor
    , contributor
    Comments (560) | Send Message
     
    Dove's $18 is conservative. I believe Bill Ackman will release his 50 or 100 page valuation and thesis (with legal cases) on FNMA. Once that happens, I think FNMA stock price will materially appreciate. But ultimately the fair value will be reached ONLY after court settlement on the "net sweep amendment".

     

    I think the exit proposal is somewhat of red herring. I do believe that very low interest of 30 year mortgage and the 30 year mortgage itself, exists because of the implicit guarantee for the funding (agency MBS that is sold all over the world).
    So any exit proposal IMO will have some sort of Govt insurance. Now exit proposal could attract multiple players. But don't forget the OP Co assets of GSE's , they will sold for the highest value. Also, remember value of the existing portfolio.
    27 Feb 2014, 06:56 AM Reply Like
  • dnguyen41509
    , contributor
    Comments (3) | Send Message
     
    the DOJ just hires the lawyer who works for Mr. Putin :)
    27 Feb 2014, 09:29 PM Reply Like
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