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.

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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.

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