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Derivatives aren't a one-time occurrence. They are an every quarter occurrence, which is when they are marked.
The bolded part of the article you highlight is partially correct. The part that is correct is that derivative losses are going to be brutal in 2nd Q.
At end of 2011, the ten-year treasury rate was 1.87% if I remember correctly. At the end of Q1, it was 2.21%, again if I remember correctly. Today it around 1.78%. At end of Q2, it will "mark", and give a decent indication of where the derivative losses will be.
If Fannie is going to take it in the A-noose for Q2, hope for that 10-year to be as low as possible. It helps set up Q3 for a derivatives gain.
FYI, Freddie accounts for derivatives in a different method. Over 50% of their draws is because of derivatives. If Freddie hedged like Fannie, they'd be rockin'.
I think I have a good idea where your head is at. I tend toward the bullish version of things. ;)
The stock price will be $0.25 to $0.26 by the end of the week, right where it was before quarterly earnings. :/
I am always realistic and critical, therefore a 2$ is not for the near future.
There have been some very serious pops for Chinese RTO's on positive earnings. Most have been short lived. SIAF is different because of the Form 10 though.
You don't go to Sweden with that presentation (full of promises) and then report a mediocre Q1 results. Lots of positive news on the horizon.
A Note on Corporate Structure
Layers of a Corporate Balance Sheet, broadly includes:
-Senior Secured
-Senior Unsecured
-Subordinated
-Preferred Stock
-Common Stock
The higher up the food chain, the better off you will be. FnF aren't typical. Conservatorship is another way of saying bankruptcy, and typically in bankruptcy, the secured and senior guys get out whole. The sub debt gets a haircut. The preferreds get flipped and are usually converted to new common shares in the new entity(ies). The old equity (i.e., commons) ends being heavily diluted or worthless.
FNMAS.OB > FNMA.OB
I thought you said we were going to $0.50+ today?
Did you read your link? They hold ~1% of the total float.
Look, I'm long FnF preferreds and sometimes commons but if you're thinking of a short term mo-mo trade, there are better candidates out there.
"30 minutes 3.2 million volume great...."
~~You're gonna need a lot more volume than that to reach $0.35 cents, let alone your prediction of $0.50 for today. You looked up the number of shares: 1B plus. No institutional ownership means massive volume is required to move these shares.
17 million shares short means nothing other than it's a very small percentage.
Freddie Mac needs funds, Fannie doesn't!
Freddie's draw so far = $72.3B
Fannie's draw so far = $116.1B
Can you successfully navigate an argument around this? Hint, it's not too hard.
"FNMA can get back to dollars so can regain listing compliance."
~~Sigh. Fannie and Freddie voluntarily delisted to save the listing fees during conservatorship. Even if they did reach the $1 plateau, which they won't unless a favorable political decision is made, they wouldn't try to uplist because they are still under conservatorship.
New rules to PROMOTE more dividend payout
http://www.cnbc.com/id/47353036
2) Securities regulators announce new rules to promote more dividend payout by listed companies, and may disclose names of companies with low dividend payout histories.
Don't let the little day trading monkeys fool ya. Fannie has a huge float with zero institutional investment. It takes huge volume to produce a spike. It ain't happening. Fannie will post a loss next quarter unless interest rates go up again. If not, it'll cause a significant derivatives loss.
What I'm saying is, it's still a long road.
I believe he is saying that your timing is impeccable.
Fannie Q1 results out. No treasury draw. Let's see what happens in the market today.
I invested in Fannie preferreds but sometimes dabble in commons.
Was surprised to see Freddie have a minuscule draw on the back of a $1B+ derivatives loss. Am less hopeful of an upside surprise for Fannie in Q1. Freddie uses a different "hedge accounting" method than Fannie so they could still do it.
Fannie will need to have $1B derivatives gain and only $4B added in loan loss reserves, or any combo where the two add up to only a negative $3B, to avoid another draw in Q1.
Comparable Structure of another Publicly-Owned Company similar to SIAF?
REITs pay out 90% but do so because of preferential tax treatment. My mother worked at an agricultural holding company that was very lucrative for a number of years. But it was private. Da rich folk typically like to keep the cash cow to themselves.
Any comparable companies out there?
I predict!
Freddie, and possibly Fannie, post a profit this quarter. Results will be reported between now and May 15th.
I was holding Freddie when it posted a profit (before divvies) in the 2nd quarter 2009. Common share price tripled in less than a week.
In no particular order:
HPI was positive in February.
Derivatives should post a decent gain.
AOCI should post a gain.
Serious delinquency rate down 7 basis points for the quarter.
FHA raised rates by 75 basis points to shrink market share. Please allow Fannie and Freddie to step into that void because private market won't.
G Fee increase (10 BP to treasury) had a nice little benefit of "forcing" Fannie and Freddie to implement a uniform G Fee structure to big banks (23 bp) and small banks (27 bp), i.e., they had to raise their portion of the G fee.
Lots of things lining up nicely. It'll be interesting to see how the market reacts.
SIAF gets 150% premium above market.
Here are the numbers I ran on the topic.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=te&bn=139878&tid=221&mid=221&tof=50&frt=1#221
Smoot Hawley Tariff act is my guess as well.
Not sure how it applies here though. SH is generally seen as bad for the US economy. Per Solomon's speech, no beef can be imported except from New Zealand or Uganda. This ban appears to be good for SIAF.
Hello folks, I'm a newbie to iHub. Name is David.
Got some questions if I may. I've googled Jordan fund. All I can find about them is that page linked here often, displaying their portfolio of stocks and some comments.
Who is the Jordan fund? I realize they are a hedge fund but any more details?
They own 51% or so of SIAF?
What's to stop the Jordan fund from completely buying out the company just prior to it becoming "cash rich"?
Thanks.
Nice price action today.
http://i65.photobucket.com/albums/h231/NYKnuckleballer/siaf.png
"Movin back up...about time...lol...Patience is key"
Closed yesterday at $0.71. Already have a bid in pre-market for $0.74 (2,500 shares showing). It's probably going to be a "fun" day.
"About Q1-12 he could only say it looks good and according to plan.
My only concern is regarding we will get the share price up. SIAF needs friends in high places and a lot of media attention this fall."
I suspect a lot of his reticence about how they are going to get the price up is probably tied to first quarter results, which are known to Solomon. We've traded at a PE of 3 recently. No reason to think we can't again. And we all know 1st Q results are gonna rock with the new beef and prawn deals.
BTW, thanks for the recap.
I vote we "stick" this post on the top!!