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The Case For Fannie Mae: Unpacking The Motions For Summary Judgment
- Numerous plaintiffs have filed suits challenging the lawfulness of the Sweep Amendment which requires Fannie Mae to quarterly transfer its net worth to the US Treasury.
- This article is a summary of the primary legal arguments from both sides in the motions to dismiss and motions for summary judgment in cases filed by Perry Capital and Fairholme.
- After reviewing 556 pages of complaint and briefs, the plaintiffs have the stronger arguments and should win the motions.
Fannie Mae And Freddie Mac: The Bill Ackman Perspective And Huge Return Potential
- What to do with Fannie Mae and Freddie Mac is an extremely polarizing and stratified topic in Washington.
- Pershing Square's Bill Ackman has concluded, with extensive research to support it, that a private entity isn't viable without a significant increase in cost to insure MBS.
- Even with the dilutive effect of exercising warrants, the Government stands to rake in approximately $600 billion on $190 billion invested. Estimated fair market value of $23-$47 a share.
- Lawsuits are progressing through the courts. Positive strides for the investors, but far from winning their freedom from the government.
- $5.4 billion in dividends from the Second Quarter, 2014 will be paid to the U.S. Treasury.
- Expect increased regulations on GSEs and all financial companies.
- Betting on Fannie and Freddie remain a high risk/high reward investment.
Fannie Mae Q2 Earnings Down, But Credit Quality Up
Blackstone Plan Proves Value Was Taken By Treasury
- Treasury received Blackstone's recapitalization plan.
- Recap plan proves that the equity shares had some value.
- The 3rd Amendment of the PSPA was designed to destroy value.
- Mario Ugoletti's sworn testimony is contradictory to this document.
Fannie Mae & Freddie Mac: A Risk Worth Taking
- Fannie Mae and Freddie Mac seem much more likely to remain operational, as governmental regulators have indicated that they have no superior alternative.
- The Fannie Mae and Freddie Mac investor lawsuit against the Treasury Department is already strong, and seems even more promising as it attracts national attention and rallies prominent lawyers, activists.
- Our self-learning algorithm has a strong bullish signal for Fannie Mae and Freddie Mac in the 3-month and 1-year time horizons.
- Their diminishing risk and huge potential make Fannie Mae and Freddie Mac attractive investments.
- Proposed insurer rules by the FHFA help to ensure that the government will not need to bail out the mortgage giant.
- The confirmation of Julian Castro as HUD Director has depressed the shares lately, but efforts to reform the GSEs do not have the political backing to do much harm.
- Reaffirm my previous price target of $14 per share on higher G-Fees and a recovering housing market.
Fannie Mae Has Adequate Capital To Be Released From Conservatorship
- Evidence seems to suggest that the GSEs can exit Conservatorship as-is.
- Existing legislation provides capital requirements.
- Fannie Mae may have enough capital for release from government control.
- Fannie and Freddie are the best solution for low-cost American home ownership.
- Nobody will question the legitimacy of the warrants until the third amendment is reversed.
Carl Icahn Joins The Fannie Mae Common Stock Gang, Should You?
- Carl Icahn is the newest investor in Fannie Mae and Freddie Mae and joins investors such as Bruce Berkowitz and Bill Ackman.
- The common stock becomes increasingly popular with high-profile investors.
- Fannie Mae's stock price has shown great resilience after extreme levels of volatility in March.
Fannie Mae: Icahn And Ackman Actually Agree On Something
- Shares could be worth $14 each on current fee structure.
- Potential for higher fees mean value could be as high as $23 to $47 per share.
- Short-term catalysts including an end to the Net Worth Sweep or re-listing could boost shares.
- The Third Amendment Net Worth Sweep is illegal.
- Fannie Mae and Freddie Mac have paid back more than they borrowed.
- The largest investor in Fannie Mae and Freddie Mac is the American taxpayer.
- The largest beneficiary of Fannie Mae and Freddie Mac is the American taxpayer.
- Fannie Mae and Freddie Mac saved America during the crisis and are the best solution going forward.
Solutions For Fannie And Freddie's Future, But Profits Still Go To The Government
- No timeline for a resolution will continue to push all profits to federal government.
- Congress halts efforts on bills for mid-term elections.
- 20 lawsuits continue with no end in sight.
- Investor hopes spur the buying and selling.
- Fannie Mae reported $5.3 billion in income yet pays Treasury $5.7 billion in dividends.
- Freddie Mac reported $4.0 billion in income yet pays Treasury $4.5 billion in dividends.
- Both stocks have traded above $1.00 per share for over a year and should re-list.
- The Federal Housing Finance Authority is failing in their fiduciary responsibility to shareholders if they don not permit re-listing.
- Retail investors need institutional support to free the GSEs from Treasury's vampire-like gripe and allow them to recapitalize and rebuild shareholder value.
- Fannie Mae remains a speculative equity investment with a massively tilted risk/reward ratio.
- The Johnson-Crapo draft bill is only in the early stages and the legislative process is already crumbling.
- Dissent among Senate committee members makes success of the reform bill unlikely.
- Winding down Fannie Mae and Freddie Mac does not make economic sense.
Fannie Mae Reports $5.3 Billion Profit In 1st Quarter Of 2014
- Total Comprehensive Income of $5.7 Billion for the 1st Quarter.
- Diluted Pro Forma EPS of $0.93.
- Bill Ackman values these shares up to $47.
- In an absolute worst case scenario Fannie and Freddie need $190 billion.
- Treasury has swept more than $200 billion for deficit reduction.
- Fannie and Freddie employees cannot participate in reform.
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FNMA vs. ETF Alternatives
Fannie Mae is a government-sponsored enterprise that was chartered by Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold.
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