Still 50-100% upside for JPS (lower for FNMAS/FMCKJ, higher for some cheaper $50 series) in short term if it takes 5 years for dividends to resume, which would put JPS at 70-75% of par.
For common shares here is my estimate for fannie after 5 years. I have rounded numbers for ease of calculation so you may need to add/subtract several bucks:
retained earnings = $100b = $100/share earnings of $10b/year with PE of 8 = $80B = $80/share
Total common share value - $180
80% Dilution from warrants = $36 50% dilution from issuing additional stock = $18/share
Preferred assuming $25 par:
time value of money = 5% per year compounded for 5 years = 25% $25 * .75 = $18.75 value when paid off
Expected rate of return = 5% compounded for 5 years = 25% $18.75 * .75 = current value of $14/share
This makes common shares look like a better value since the common upside is 5x while the preferred upside is only 3x. I didn't adjust for the time value of common shares because the market may not wait 5 years to start pushing the share price up - maybe I should have? If I did then both common and preferred would have similar upside.
YMMV
Calabria launches a last warning to the JPS holders. 5 more years of Conservatorship means that FnF need 5 more years retaining earnings, around $140 billion together. Along with the funds owed by the Treausry so far (between $99 billion of SPS overpayments and $147 billion if we add other amounts due, like the TCCA fees) it means that there will be enough capital in 5 years' time to redeem the $33 billion worth of JPS outstanding. Two important things: If this is made public, the common stocks surge to a valuation of PER 13 times, while the JPS would trade as a discount note. Just apply a 5 yr discount rate to their par-value + the stock overhang + hedge funds' playground (around 40% off their par-value on day one). Secondly, the 5-year Conservatorship can be switched for a 5-year Capital Restoration Plan, like the one approved by the FHFA for the FHLBanks, so that FnF are freed from the Conservatorship stigma. Read #Fanniegate hashtag for more detail.