This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Fannie and Freddie: Thursday Financial Stock Winners (Update 2)

Stocks in this article: FNMAFMCC

Freddie's preferred Series Z shares, with a $25 par value and FMCKJ ticker, rose 1,2% to close at $8.20. The shares have gained 369% since closing at $1.75 at the end of last year.

Politicians in Washington have shown no inclination to help rehabilitate Fannie and Freddie so they can resume operating as privately held companies as they did before the credit crisis. The dividend gravy train also helps reduce the federal budget deficit.

With the GSEs continuing to purchase the lion's share of mortgage loans originated in the United States and holding $4.7 trillion in mortgage loans on their balance sheets as of Sept. 30, institutional investors holding common and junior preferred shares of Fannie and Freddie see real value. These investors are hoping that whatever "resolution" of the GSEs Washington comes up with, something will be left for them.

In the meantime, several institutional investors, including Washington Federal (WAFD), Perry Capital and Bruce Berkowitz's Fairholme Funds have sued the government for destroying private shareholders' property.

The ongoing Fannie and Freddie story is a fascinating one, especially since the junior preferred shares still trade at such significant discounts to par. A court victory against the government could lead to a killing for private investors.

Then again, Thursday was " Twitter (TWTR) Day." Following the pricing on Wednesday of the company's initial public offering at $26 a share, the shares began trading on the New York Stock Exchange Thursday at $45.10 and held their own, closing at $44.90. Not bad day's work for investors lucky or well-enough connected to get in on the IPO.

The broad indices were all down sharply, despite the Twitter excitement and the huge pop for shares of Geron (GERN), after the biopharmaceutical company announced the results of its imetelstat drug trials.

Investors were less than thrilled after the Bureau of Economic Analysis announced that the United States economy expanded at an annualized rate of 2.8% during the third quarter, increasing from a GDP growth rate of 2.5% during the second quarter. Economists polled by Thomson Reuters had on average estimated the third-quarter GDP growth rate would decline to 1.9%.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs