Could Fannie and Freddie Be High-Growth Investments Again?

NEW YORK (TheStreet) -- The last three years have seen a complete turnaround in the fortunes of Fannie Mae (FNMA) and Freddie Mac (FMCC), the government-sponsored enterprises.

Following Fannie's "Great Depression" dive to around 20 cents from $90 leading into and following the largest housing correction in recent memory, the federal housing lender has, like many other severely depressed stocks, become a new investment play for small-caps and over-the-counter traders.

From that 20-cent low point, Fannie -- more formally the Federal National Mortgage Association -- recovered to $5.33 in March of last year, a relatively modest price given Fannie Mae's prior levels. Its shares closed Thursday at $4, up over 33% for the year to date.

>>FIFA World Cup Still a Huge Draw Without U.S. Team

Will the stock go even higher now that the housing market is showing signs of a rebound? Carl Icahn certainly seems to think so after recent filing reports indicating an almost $50 million investment in Fannie and Freddie shares. With an investor of this caliber making waves and seemingly viewing the shares as potentially cheap it could add fuel to an already burning fire.

Icahn certainly has the ability to make fellow investors and companies listen because he's well known for shaking up management. Icahn's purchases of Fannie Mae and Freddie Mac stock were made at $4.03 and $4.04, respectively. Freddie Mac -- otherwise known as the Federal Home Loan Mortgage Corp. -- closed Thursday at $3.92, up over 35% for the year to date.

I think both of these GSEs could go the way of Las Vegas Sands (LVS), whose shares moved to $56 from from $1.38 after the stock was oversold during the real estate crash. LVS closed at $77.94 Thursday. I don't think anyone will bypass this stock again.

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

To keep up to date with all of our latest news on the OTC market sign up for free no hassle membership www.superstockprofits.com

More from Opinion

7 Takeaways From Google's $550-Million Investment in Alibaba Rival JD.com

7 Takeaways From Google's $550-Million Investment in Alibaba Rival JD.com

It's Just Not Smart For Investors to Ignore the Threat of a Trade War

It's Just Not Smart For Investors to Ignore the Threat of a Trade War

To Think a Trade War's Still Just a Threat Is the Dumbest Thing on Wall Street

To Think a Trade War's Still Just a Threat Is the Dumbest Thing on Wall Street

Flashback Friday in Politics: Trade Wars, Manafort, Immigration Dominate Minds

Flashback Friday in Politics: Trade Wars, Manafort, Immigration Dominate Minds

Microsoft and Sony's Rumored Game Console Plans Bode Well for AMD

Microsoft and Sony's Rumored Game Console Plans Bode Well for AMD