Replies to post #810162 on Fannie Mae-No Politics (FNMA)

[Ftor]

can anyone please answer my questions? just for my understanding

[Stern is Bald]

Do your own research 

[Guido2]

1) If government releases them and voids the SPS and warrants, the price would immediately jump over $100.
2) Both are currently trading "over-the-counter". Ackman means list on NY Stock Exchange or NASDAQ.
3) You continue to hold the shares you hold. If the capital requirements are revised to reflect last four years' stress test results, there's no need for additional capital.

[DCBill]

Both were delisted from the major systems shortly after Paulson's 2008 "Conservatorship" capert; since they still were/are public companies (recently trading below a dollar per common share), they are traded on the "pink sheets," where low-dollar stock corporations are traded.
If they get revived by the Trump Admin (not certain because of the major ideological, partisan (in both parties), and commercial business enemies), the stocks should rise, if they receive some major capital relief.
A strong Trump push--with a compliant MAGA running both chambers-- could overcome those operational and trading obstacles but, again, not guaranteed.
Related, but just history.
When I worked there over 20 years ago, Fannie common shares traded in the 80's, after a couple of stock splits; ditto Freddie in those ranges.

[Viking61]

Commons would be significantly higher than they are now even with everything thrown at them.

[Rodney5]

Good morning Ftor,
You’re asking for the calculated value of your investment in Fannie Mae common stock.

Fannie Mae P/E

To calculate the price-to-earnings (P/E) ratio, you can divide a stock's current price by its earnings per share

$18.8 billion net income per year / 1,158,087,567 = $16.23 per share of earnings,

Current Price $4.47 / $16.23 earnings = 0.27 P/E

The price to earnings time valuation calculates less than one third of yearly earnings.

Value of Fannie has never been in question. How much of that value will each equity class of shareholder receive is the unknown. Senior Preferred Stock, JPS and Common Shareholders. The JPS par value is $19 billion and no more. The Seniors depends on how much equity the Treasury will possibly steal, left over goes to the Common. The Common Stock owns the company and the common is the gift that keeps on giving.

I believe the Market will easily pay 14 times earnings under favorable conditions when the Treasury gets out of the way.

PE Ratio of 14 x $16.23 = $227.22 per share intrinsic value. This value is calculated with no delusion of the common stock outstanding. Again, we do not know the amount of value the Treasury will take.

The above calculation is earnings power of the business only. Tier 1 capital refers to Fannie’s equity capital and disclosed reserves. It is used to measure the company’s capital adequacy.

Fannie Mae Latest 10Q September 30, 2024
Page 64

https://www.fanniemae.com/media/53651/display

Equity $90.5 billion should be added to price per share.

The company debt is negligible by reason debt is backed by Real Property.