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Also traded in: Argentina, USA

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 5/10

vs
industry
vs
history
Cash to Debt 0.01
OTCBB:FNMA's Cash to Debt is ranked lower than
99% of the 1088 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.69 vs. OTCBB:FNMA: 0.01 )
Ranked among companies with meaningful Cash to Debt only.
OTCBB:FNMA' s Cash to Debt Range Over the Past 10 Years
Min: 0  Med: 0.01 Max: N/A
Current: 0.01
Interest Coverage 0.17
OTCBB:FNMA's Interest Coverage is ranked lower than
94% of the 1429 Companies
in the Global Specialty Finance industry.

( Industry Median: 1.82 vs. OTCBB:FNMA: 0.17 )
Ranked among companies with meaningful Interest Coverage only.
OTCBB:FNMA' s Interest Coverage Range Over the Past 10 Years
Min: 0.11  Med: 0.22 Max: 0.41
Current: 0.17
0.11
0.41
F-Score: 2
WACC vs ROIC
4.18%
0.31%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 7/10

vs
industry
vs
history
Operating margin (%) 74.30
OTCBB:FNMA's Operating margin (%) is ranked higher than
97% of the 1590 Companies
in the Global Specialty Finance industry.

( Industry Median: 30.86 vs. OTCBB:FNMA: 74.30 )
Ranked among companies with meaningful Operating margin (%) only.
OTCBB:FNMA' s Operating margin (%) Range Over the Past 10 Years
Min: -1730.02  Med: 44.49 Max: 381.3
Current: 74.3
-1730.02
381.3
Net-margin (%) 49.31
OTCBB:FNMA's Net-margin (%) is ranked higher than
91% of the 1593 Companies
in the Global Specialty Finance industry.

( Industry Median: 22.37 vs. OTCBB:FNMA: 49.31 )
Ranked among companies with meaningful Net-margin (%) only.
OTCBB:FNMA' s Net-margin (%) Range Over the Past 10 Years
Min: -1705.43  Med: 39.59 Max: 502.24
Current: 49.31
-1705.43
502.24
ROE (%) -10.07
OTCBB:FNMA's ROE (%) is ranked lower than
97% of the 1589 Companies
in the Global Specialty Finance industry.

( Industry Median: 8.01 vs. OTCBB:FNMA: -10.07 )
Ranked among companies with meaningful ROE (%) only.
OTCBB:FNMA' s ROE (%) Range Over the Past 10 Years
Min: -416.6  Med: -5.99 Max: 109.18
Current: -10.07
-416.6
109.18
ROA (%) 0.30
OTCBB:FNMA's ROA (%) is ranked lower than
83% of the 1598 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.86 vs. OTCBB:FNMA: 0.30 )
Ranked among companies with meaningful ROA (%) only.
OTCBB:FNMA' s ROA (%) Range Over the Past 10 Years
Min: -8.08  Med: 0.10 Max: 2.59
Current: 0.3
-8.08
2.59
Revenue Growth (3Y)(%) 16.80
OTCBB:FNMA's Revenue Growth (3Y)(%) is ranked higher than
88% of the 1284 Companies
in the Global Specialty Finance industry.

( Industry Median: 2.10 vs. OTCBB:FNMA: 16.80 )
Ranked among companies with meaningful Revenue Growth (3Y)(%) only.
OTCBB:FNMA' s Revenue Growth (3Y)(%) Range Over the Past 10 Years
Min: -60.1  Med: 13.95 Max: 64.9
Current: 16.8
-60.1
64.9
EPS Growth (3Y)(%) -65.20
OTCBB:FNMA's EPS Growth (3Y)(%) is ranked lower than
91% of the 1165 Companies
in the Global Specialty Finance industry.

( Industry Median: 7.60 vs. OTCBB:FNMA: -65.20 )
Ranked among companies with meaningful EPS Growth (3Y)(%) only.
OTCBB:FNMA' s EPS Growth (3Y)(%) Range Over the Past 10 Years
Min: -65.2  Med: 7.00 Max: 22.3
Current: -65.2
-65.2
22.3
» OTCBB:FNMA's 10-Y Financials

Financials


Revenue & Net Income
Equity & Asset
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

2015

FNMA Guru Trades in 2015

Fairholme Fund 15,468,800 sh (unchged)
» More
2015

FNMA Guru Trades in 2015

Fairholme Fund 13,801,100 sh (-10.78%)
» More
2015

FNMA Guru Trades in 2015

Fairholme Fund 13,801,100 sh (unchged)
» More
2015

FNMA Guru Trades in 2015

Fairholme Fund 15,476,100 sh (+12.14%)
» More
» Details

Insider Trades

Latest Guru Trades with OTCBB:FNMA

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Preferred stocks of Fannie Mae

SymbolPriceYieldDescription
FNMAT4.100.00
FNMAI2.650.00
FNMFM3.960.005.10 % Pfd Shs Series -E-
FNMAL4.000.004.75% NonCumulative Preferred Stock, Series M
FNMAP4.500.00Variable Rate NonCumulative Preferred Stock, Series F
FNMAG4.200.005.375% NonCumulative Preferred Stock, Series I
FNMAM4.250.005.81% NonCumulative Preferred Stock, Series H
FNMFN4.650.00
FNMAH2.200.00
FNMAJ2.490.00
FNMAS3.050.00
FNMAO5.100.00Variable Rate NonCumulative Preferred Stock, Series G
FDDXD3.690.00
FNMFO8503.000.005 3/8 % Conv Pfd Shs Series 2004-I

Guru Investment Theses on Fannie Mae

Bruce Berkowitz Comments on Fannie Mae - Feb 03, 2016

In 1986, famed Magellan Fund manager Peter Lynch touted Fannie Mae (OTCBB:FNMA) as “the best business, literally, in America.” At that time, Fannie Mae had a price-to-earnings ratio of one. Lynch noted that “when a company can earn back the price of its stock in one year, you’ve found a good deal.” Thirty years later, the price-to-earnings ratio of Fannie Mae is back at one – but the circumstances are quite different. In our view, current prices of Fannie Mae as well as its smaller cousin Freddie Mac do not refl ect the economic value of existing assets, let alone future earnings power, embedded in these world-class franchises. Indeed, the companies are not priced for a run-off of their existing businesses; they are priced for the permanent expropriation of all assets.

Fannie Mae and Freddie Mac represent 16.4% of Fund assets, primarily in the form of preferred stock. For those unfamiliar, Fannie Mae and Freddie Mac are simple and straightforward insurance companies. They are not banks. There isn’t a local Fannie Mae or Freddie Mac branch on the street corner. Unlike the big banks, Fannie Mae and Freddie Mac did not commit any consumer fraud in the run-up to the fi nancial crisis. The two do not originate mortgages and they do not deal directly with individual homeowners. However, when it comes to funding our nation’s housing market, Fannie Mae and Freddie Mac are mission critical. The companies have helped tens of millions of American families buy, rent, or refi nance a home even during the toughest economic times when banks and other lenders shun mortgage risk. Bottom line: Fannie Mae and Freddie Macare the housing fi nance system in America, and earn a nominal amount (less than 40 basis points) for ensuring that the venerable 30-year fi xed-rate mortgage remains widely accessible and affordable.

During the 2008 fi nancial crisis, Fannie Mae and Freddie Mac helped save America’s home mortgage system and resuscitated our national economy by continuing to provide liquidity when credit and insurance markets froze solid. According to a comprehensive analysis by Thomas Ferguson and Robert Johnson published in the International Journal of Political Economy, federal regulators explicitly directed Fannie Mae and Freddie Mac to initiate massive purchases of “home mortgages and mortgage bonds to stem declines in those markets and alleviate pressures on the balance sheets of private fi rms,” particularly “overburdened banks.” Then in 2012, Treasury’s decision to usurp all of the profi ts from each company in perpetuity (the so-called “Net Worth Sweep”) improved the federal budget defi cit in an election year and avoided protracted debt ceiling negotiations with Congressional Republicans.

Roger Parloff’s recent Fortune magazine piece – “How Uncle Sam Nationalized Two Fortune 50 Companies” – details the de facto nationalization of Fannie Mae and Freddie Mac by the federal government and the determined effort by a handful of bureaucrats to hide the truth from the public:

For reasons that remain shrouded in secrecy to this day, the Treasury Department and the companies’ conservator, the Federal Housing Finance Agency (FHFA) – two arms of the same government – agreed to radically change the terms of what the GSEs would owe in exchange for the moneys they had already received. Instead of a 10% annual dividend on all the bailout funds drawn … the dividend was now to be set at 100% of each GSE’s net worth. One hundred percent. That is to say, any and all profit they posted. And this would be so in perpetuity ... The two firms, on their way back to health, were effectively nationalized. The sudden change was called the “third amendment,” an innocuous-sounding designation that belies its momentous consequences … If this strikes you as, well, un-American, you’re not alone … The government’s alleged nationalization of two enormous corporations raises potentially landmark constitutional issues – comparable to President Harry Truman’s attempt to nationalize steel mills during the Korean War … Seven years into their conservatorship, the GSEs remain adrift, with shrinking capital reserves and no exit plan—a dormant, festering crisis … Documents and depositions from officials at Treasury and FHFA, obtained in discovery in a suit brought by Fairholme Fund (Trades, Portfolio)s, show that the government’s story is “highly misleading” in some respects and “outright false” in others, plaintiffs lawyers allege in court briefs … The lawyers can’t tell the media (or even their clients) specifically what the documents and depositions show, however. That’s because Court of Federal Claims Judge Margaret Sweeney has ordered those materials sealed from public view, at the government’s behest. Bewilderingly, the Justice Department has persuaded her that disclosure of that information—concerning a now three- to eight-year-old decision-making process of tremendous public interest—might cause “dire harm” and “place this nation’s financial markets in jeopardy” … The spectacle of a conservator wiping out shareholders just as the companies he’s supervising are about to have their best years in history simply doesn’t smell right. It’s hard to picture the Supreme Court letting it stand.

The market gyrations experienced during 2015 do not reflect our progress in halting Treasury’s unlawful taking of Fannie Mae’s and Freddie Mac’s assets. Indeed, newly discovered evidence – which shows the government’s defense to be outright false – was subsequently presented to the D.C. Circuit Court (under seal as required), and plaintiffs in other cases from the Northern District of Iowa to the Eastern District of Kentucky have now obtained these documents as well. We remain confident that Treasury’s deliberate effort to realign the equity of each company and allocate all profits to itself in perpetuity is strictly prohibited by federal and state law, and anticipate that several of these cases will be adjudicated this year.

Today, taxpayers own 79.9% of Fannie Mae and Freddie Mac. In this respect, taxpayers are fully aligned with private shareholders of these extremely valuable companies. In our view, anyone claiming that shareholders are seeking remuneration at “taxpayer expense” is peddling fiction. Only the disingenuous would assert that recapitalization of these companies would take decades and come at taxpayer expense, as if retaining earnings precluded the ability of each company to raise equity from private investors. Only those beholden to special interests would ignore the substantial reforms implemented at Fannie Mae and Freddie Mac over the last eight years and pretend that the companies are somehow doomed to repeat the past upon release from conservatorship. Only those who oppose the dream of American homeownership would attempt to dismantle President Franklin Roosevelt’s New Deal by eliminating two publicly traded, shareholder-owned companies that have single-handedly provided $7 trillion dollars – yes, trillion – in liquidity to support America’s mortgage market since 2009.

Shareholders simply request that the Treasury Department respect the capital structure of each company, respect the economic bundle of rights associated with our securities, and respect the law setting forth the rules of a conservatorship as decreed by Congress. The economist Herbert Stein once famously said: “If something cannot go on forever, it will stop.” Sooner rather than later, we believe the Net Worth Sweep will be halted and a common sense solution will prevail: Fannie Mae and Freddie Mac will transform into low-risk, public utilities with regulated rates of return, just like your local electric company.

From Bruce Berkowitz (Trades, Portfolio)'s 2015 Annual Letter for the Fairholme Fund.

Check out Bruce Berkowitz latest stock trades

Ratios

vs
industry
vs
history
P/S 0.39
FNMA's P/S is ranked higher than
98% of the 2513 Companies
in the Global Specialty Finance industry.

( Industry Median: 2.57 vs. FNMA: 0.39 )
Ranked among companies with meaningful P/S only.
FNMA' s P/S Range Over the Past 10 Years
Min: 0.05  Med: 0.60 Max: 5.17
Current: 0.39
0.05
5.17
EV-to-EBIT 225.09
FNMA's EV-to-EBIT is ranked lower than
99% of the 2044 Companies
in the Global Specialty Finance industry.

( Industry Median: 12.62 vs. FNMA: 225.09 )
Ranked among companies with meaningful EV-to-EBIT only.
FNMA' s EV-to-EBIT Range Over the Past 10 Years
Min: -425.4  Med: 7.75 Max: 9471.5
Current: 225.09
-425.4
9471.5
EV-to-EBITDA 225.09
FNMA's EV-to-EBITDA is ranked lower than
99% of the 2053 Companies
in the Global Specialty Finance industry.

( Industry Median: 11.33 vs. FNMA: 225.09 )
Ranked among companies with meaningful EV-to-EBITDA only.
FNMA' s EV-to-EBITDA Range Over the Past 10 Years
Min: -425.4  Med: 24.60 Max: 9471.5
Current: 225.09
-425.4
9471.5

Valuation & Return

vs
industry
vs
history
Price/Projected FCF 2.73
FNMA's Price/Projected FCF is ranked lower than
99.99% of the 1071 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.64 vs. FNMA: 2.73 )
Ranked among companies with meaningful Price/Projected FCF only.
FNMA' s Price/Projected FCF Range Over the Past 10 Years
Min: 0.07  Med: 1.58 Max: 21
Current: 2.73
0.07
21
Price/Median PS Value 0.64
FNMA's Price/Median PS Value is ranked higher than
82% of the 1761 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.94 vs. FNMA: 0.64 )
Ranked among companies with meaningful Price/Median PS Value only.
FNMA' s Price/Median PS Value Range Over the Past 10 Years
Min: 0.13  Med: 6.12 Max: 44.02
Current: 0.64
0.13
44.02
Price/Graham Number 0.09
FNMA's Price/Graham Number is ranked higher than
99% of the 1720 Companies
in the Global Specialty Finance industry.

( Industry Median: 0.79 vs. FNMA: 0.09 )
Ranked among companies with meaningful Price/Graham Number only.
FNMA' s Price/Graham Number Range Over the Past 10 Years
Min: 0.01  Med: 1.41 Max: 2.31
Current: 0.09
0.01
2.31
Earnings Yield (Greenblatt) (%) 0.40
FNMA's Earnings Yield (Greenblatt) (%) is ranked lower than
89% of the 1519 Companies
in the Global Specialty Finance industry.

( Industry Median: 7.20 vs. FNMA: 0.40 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
FNMA' s Earnings Yield (Greenblatt) (%) Range Over the Past 10 Years
Min: 0.2  Med: 0.90 Max: 16.8
Current: 0.4
0.2
16.8
Forward Rate of Return (Yacktman) (%) -13.50
FNMA's Forward Rate of Return (Yacktman) (%) is ranked lower than
89% of the 869 Companies
in the Global Specialty Finance industry.

( Industry Median: 14.65 vs. FNMA: -13.50 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) (%) only.
FNMA' s Forward Rate of Return (Yacktman) (%) Range Over the Past 10 Years
Min: -14.3  Med: 1135.20 Max: 3292
Current: -13.5
-14.3
3292

More Statistics

Revenue(Mil) $19875
EPS $ -0.08
Beta5.02
Short Percentage of Float12.12%
52-Week Range $0.98 - 3.51
Shares Outstanding(Mil)1158.08

Business Description

Industry: Banks » Specialty Finance
Compare: » details
Traded in other countries:FNMA.Argentina, FNMFM.USA,
Fannie Mae is a government-sponsored enterprise that was chartered by Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. The Company has three business segments for management reporting purposes namely Single-Family Credit Guaranty, Multifamily, and Capital Markets. Single-Family business provides funds to the mortgage market by acquiring single-family loans through lender swap transactions or, working also with its Capital Markets group, through loan purchases. Its Single-Family business has primary responsibility for pricing and managing the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Multifamily business provides mortgage market liquidity for properties with five or more residential units, which may be apartment communities, cooperative properties, seniors housing, dedicated student housing or manufactured housing communities. Its multifamily business works with its lender customers to provide funds to the mortgage market primarily by securitizing multifamily mortgage loans into Fannie Mae MBS. The Company also purchase multifamily mortgage loans and provide credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. In addition, it has offered debt financing structures that can be used to facilitate construction loans. Its multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae's portfolio, as well as to facilitate portfolio securitization and resecuritization activities. Capital Markets group manages its mortgage-related assets and other interest-earning non-mortgage investments. It funds its purchases primarily through proceeds it receives from the issuance of debt securities in the domestic and international capital markets. Capital Markets group's business activity is primarily focused on making short-term use of balance sheet rather than on long-term investments. Its competitors include Freddie Mac, FHA, Ginnie Mae, the twelve FHLBs, financial institutions, securities dealers, insurance companies, pension funds, investment funds and other investors.
» More Articles for OTCBB:FNMA

Headlines

Articles On GuruFocus.com
Bruce Berkowitz Comments on Fannie Mae Feb 03 2016 
Bruce Berkowitz's Annual Shareholder Letter for Fairholme Allocation Fund 2015 Feb 03 2016 
Bruce Berkowitz's Fairholme Fund Annual Letter Feb 03 2016 
Pershing Square's New Presentation, Part 2 Jan 29 2016 
Scion Capital's 2006 Letter to Shareholders Dec 30 2015 
Bill Ackman Comments on Fannie Mae (FNMA) / Freddie Mac (FMCC) Dec 16 2015 
Ackman Expects 'Messy' 4th Quarter Due to Valeant Meltdown Dec 16 2015 
Bruce Berkowitz Sends Letter on Fannie Mae and Fight for Mortgage Market Dec 10 2015 
Bill Ackman Comments on Fannie Mae, Freddie Mac Sep 11 2015 
Bruce Berkowitz's Semi-Annual Shareholder Letter Sep 11 2015 

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