Federal Home Loan Mortgage Corporation, referred to as Freddie Mac (OTCQB:FMCC) is a stock-holder owned corporation and was created to expand a 2nd market for mortgages. Freddie Mac is the second largest government mortgage funding entity. FMCC buys the secondary mortgages and increases the supply of money available for mortgage lending and increases the money available for new home purchases. Interest rates could go down as a result and owners of FMCC debt and the Asian central banks who had increased their holdings in these bonds may be protected. On September 8, 2008, the stock plummeted to about a dollar, and on on June 16, 2010, dropped another 50%. FMCC charges a "guarantee fee" on loans and is there primary money maker. Investors let FMCC do this as per they assume all of the risk if the loan is not paid back.
FMCC has reported that they have a third quarter profit and that they would not ask the U.S. Treasury for more funds. When the quarter ended September 30th, the company had a 2.9B net income as compared to a 4.4B loss just a year ago. They claim that a favorable market is the cause.
FMCC is currently trading for $.797. Over the past 52 weeks, the stocks have ranged from a low of $0.1431 up to $1.44. On the previous close they were at $0.782. FMCC's market cap is 521.98M. There best day thus far into the year was March 21st at $1.42. Can they meet that mark again by the end of the year?
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Donald H. Layton
Ross J. Kari
John R. Dye
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.