Question 1

What are the main strengths of investing in FM?

Accepted Answer

The main strengths of investing in Fannie Mae include: Privatization Upside Potential & Policy Support: Treasury-FHFA agreement in January 2025 restored Treasury's consent rights for conservatorship release, while incoming administration signals more favorable stance toward GSE privatization, creating potential for significant valuation uplift from current distressed levels., Dominant Market Position & Financial Recovery: Supporting 70% of U.S. mortgage market with $3.7 billion Q1 2025 net income and $19.9 billion year-over-year equity growth, demonstrating strong operational performance and approaching 10.5% Common Equity Tier 1 capital target requirements., Essential Housing Market Infrastructure: Critical role in $648 billion annual banking system liquidity provision and 4.92 million projected 2025 home sales, with improving housing market outlook and mortgage rate expectations declining to 6.1% by end-2025 supporting long-term demand fundamentals..

Question 2

What are the potential drawbacks of investing in FM?

Accepted Answer

Potential drawbacks of investing in Fannie Mae include: Analyst Downgrades & Valuation Concerns: Keefe, Bruyette & Woods downgraded to "underperform" citing overvaluation at current levels, while complex privatization process carries execution risks that could result in mortgage rate increases of 60-90 basis points without proper government backstop., Conservatorship Uncertainty & Capital Gap: Remains under government conservatorship since 2008 with $200 billion Tier 1 capital gap and $120.8 billion senior preferred stock overhang, creating complex exit pathway requiring methodical FHFA process to minimize market disruption., Historical Volatility & Dividend Suspension: Stock value collapsed to near-zero during financial crisis with no dividends paid since 2008, while over-the-counter trading status and complex capital structure create ongoing investment uncertainty despite recent equity growth and operational improvements..

Question 3

What are the key financial metrics for FM?

Accepted Answer

Key financial metrics for Fannie Mae include: Market Cap: $14.84 billion, Current Price: $470.85.

Fannie Mae

Key Statistics

Valuation

Trading Info

52 Week

Dividends

Detailed View

FM

ESG Ratings