Here’s what most people are missing about Fannie Mae (FNMA) and Freddie Mac (FMCC): These two companies aren’t “spec plays” anymore, they’re cash machines that the market hasn’t caught up with yet.
Freddie Mac is up +709% in one year and still called “undervalued.”
FNMA = $11.23 / FMCC = $10.13 right now.
Analysts put fair value near $119 per share based on cash flow and revenue (DCF model).
Both trade at a price-to-sales ratio of 1.4x, far below the normal range of 3–4x for healthy financials.
That means the market is still pricing them like they’re in trouble, when in reality both have: - Over $100 billion in net worth - 31 straight quarters of profit - Nearly $7 trillion in mortgages under guarantee
Recent leadership changes, like firing the FHFA’s Chief Counsel and cutting DEI/ESG departments aren’t chaos; they’re streamlining. It’s the kind of cleanup you do before a company goes public.
If the government drops capital requirements to 2.5% (as Bill Ackman suggested), it’ll massively reduce any need for dilution before the IPO. That’s the real game-changer.
So whether you’re new or been here for years, remember this: *******Fannie and Freddie already earned their way out of conservatorship. The market just hasn’t priced it in yet.
!!!! KNOW WHAT YOU OWN !!!! ;)
F2 Common Long and Strong. This isn’t luck --- it’s math meeting patience.
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