Fannie Mae Common And Preferreds: The Home Stretch
Federal National Mortgage Association is nearing release from conservatorship, unlocking value for common shares and preferreds FNMAS and FNMAT; all rated Buy. FNMA's book value exceeds $100B, trades at a discount, and offers attractive risk-reward under $10 despite potential dilution from government warrants. Preferreds FNMAS and FNMAT offer potential high yields, trade at large discounts to par, and provide better downside protection versus common shares.
Fannie Mae And The Price Of Scarcity: Valuing A Unique Business
Fannie Mae is poised for a historic IPO, with valuations estimated between $210B and $420B depending on market sentiment and deal structure. A small IPO float (3–6%) is expected, driving scarcity premiums and likely oversubscription, with institutional and retail investors targeted for long-term ownership. Valuation scenarios use normalized earnings and tangible book, referencing pre-conservatorship multiples; base case values FNMA near $300B, or high-$40s per share.
4 Scenarios For Fannie Mae And Its Preferreds
Fannie Mae faces a pivotal year as a potential IPO looms, with key implications for both common and junior preferred shareholders. Investment outcomes hinge on the IPO price, government treatment of senior preferreds, and whether junior preferreds gain conversion rights or dividend reinstatement. Four scenarios are offered. High-coupon preferreds like FNMAS and FNMAT offer significant upside in most of them, while FNMA common has both the most potential upside and risk.
Chart Of The Day: The Phoenix Known As Fannie Mae
The MoneyShow Chart of the Day shows what happened to Fannie Mae (FNMA) in the last 12 months. The stock saw a 796% gain in the period. The Trump Administration is seriously considering selling a large chunk of its holdings in the firm - anywhere from 5% to 15%.
Fannie Mae Series S And T Preferreds Are Still Buys
Fannie Mae Series S and T preferreds offer compelling value due to deep discounts to par and double-digit yields, with less risk than common shares. The investment thesis remains intact: ending conservatorship would unlock value for preferreds, as they avoid dilution risk faced by common shareholders. Recent price movements reflect the lower risk profile of preferreds, not just market sentiment; government signals remain mixed but do not undermine the thesis.
Federal National Mortgage Association (FNMA) Q2 2025 Earnings Call Transcript
Federal National Mortgage Association (OTCQB:FNMA) Q2 2025 Earnings Conference Call July 30, 2025 8:00 AM ET Company Participants Chryssa C. Halley - Executive VP & CFO Priscilla Almodovar - President, CEO & Director Terence O'Hara - Corporate Participant Operator Good day, and welcome to the Fannie Mae Second Quarter 2025 Financial Results Webcast.
Fannie Mae: A Deeply Misunderstood Story
Rarely has a stock been so disconnected from its intrinsic value. Years of political noise and complex structures have obscured a thesis with the most asymmetric risk/reward profile. The Trump administration is lined up to carry out the exit: cancellation of Senior Preferred Shares (SPS), partial conversion of Junior Preferreds (JPS) and privatization. The thesis is that the Treasury can cancel the SPS justifying that it has already recovered more than $300 billion in revenue vs $191 billion initial investment (>11% IRR).
Fannie Mae: Better Price, Plus One Less Obstacle
With Trump's Big, Beautiful Bill passed and FNMA's stock price lower, risk has decreased, making FNMA a Buy now. Book value approaches $100B, while market cap lags, offering attractive valuation; improved liquidity further strengthens the investment case. Key risk remains government actions on ending conservatorship, but recent progress and discussions increase confidence in a favorable outcome.
Fannie Mae's Undervalued Preferreds: Series S And T
Fannie Mae's Series S and T preferreds are deeply discounted, offering double-digit yields and significant upside if conservatorship ends. Both issues are likely candidates for redemption due to their high coupons, which could drive prices toward par and nearly double current value. Risks include alternate government actions and non-cumulative dividends, but strong earnings and incentives support dividend resumption and redemption.
Highly Asymmetric Bet On The Trump Administration Through Fannie Mae
Investing in Fannie Mae offers a high-risk, high-reward opportunity due to the potential exit from conservatorship, which could yield substantial returns if successful. The market underestimates the probability of Fannie Mae exiting conservatorship; I believe the chance is over 50%, compared to the market's 22%. Fannie Mae's stable business model and the Trump administration's track record of following through on his campaign promises make this a compelling asymmetric bet.
Fannie Mae Preferred Buying Opportunity
The recent market selloff presents a buying opportunity in Fannie Mae preferred shares. Lower mortgage interest rates should alleviate concerns that releasing Fannie Mae and Freddie Mac from government control will increase mortgage costs for homeowners. Preferred shares have less potential upside than FNMA common but are less risky.
Home buyers are fed up with high mortgage rates, Fannie Mae says
The vast majority of people in the U.S. believe it is a bad time to buy a home.
