Stockchase Opinions

Lou HollandFreddie MacFMCCTOP PICKSep 24, 2004

(Top Sell) Starting to crumble. Freddie Mac started several months ago and Fannie Mae has just started. Don't think it's over.

$64.59

Stock price when the opinion was issued

$5.99

As of Jun 05, 2026. Market Open.

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COMMENT

If you decide to buy at this point in time, you have to have a very strong stomach because you don’t know what the US government is going to do. There is always a danger that they may just get rid of it and potentially you lose all your money. Major, major dangers when you are dealing with legislators.

COMMENT

Followed this for years and is on his watch list. In the last 2-3 years, the chart shows a period where it was at $0.30 where it stayed for a long time. Thinks there was a tremendous overreaction by the government because of a lot of problems. Through their history, they have really helped a lot of people buy houses.

COMMENT
Fannie Mae (FNM-N) and Freddie Mac (FRE-N) could fade into obscurity but he doesn't think this will happen. US government will do whatever it takes to backstop them. Good for a short-term trade but wouldn't bank on it for the long-term.
WEAK BUY
Fannie Mae (FNM-N) and Freddie Mac (FRE-N) were mainstays of the US economy but are now penny stocks. Were touted as prime blue chips for years. If you want a high risk, this could be a place to do it. Feels the risk is far less than it was before because US government has not completely moved in. Tremendous upside over time.
SELL
This is only for the faint of heart. If you own he would recommend you sell as a tax loss.
TRADE
Was a Gov’t agency, had access to treasurer. Maybe some residual value in that company.
SELL
(Market Call Minute.) It has been broken for years and will continue to be.
DON'T BUY
He prefers much steadier companies. This is effectively nationalized so it is no longer run in the best interest of the shareholders. With government not aggressively foreclosing and rewriting mortgages, it will be less profitable and could be permanently impaired.
WEAK BUY
They are contemplating a reverse stock split. Management says there is value there. A real possibility it could survive.
DON'T BUY
It could go to 0 and it is currently like a call option. It has theoretical value.
DON'T BUY
In most people's mind, the US government supports the debt of Fannie Mae (FNM-N) and Freddie Mac (FRE-N) so their debt is secure. The question is, what are they going to do with the stocks, and very importantly the preferred stocks. They are down about 50% and there is a lot of concern that they could get wiped out.
DON'T BUY
In a desperate situation. Feds are going to make sure it doesn’t go under. Could still drop another 50%-70%. Anticipate they will need another $25 billion. If things get worse, this number could skyrocket.
DON'T BUY
In a capital structure of a company, you have debt holders and equity holders. Ultimately, equity holders are the last ones on the totem pole. When the equity is getting eroded as quickly as it is, it can disappear very quickly.
BUY
Government backstops the loans for Freddie Mac (FRE-N) and Fannie Mae (FNM-N). The Government has asked for their help and have given them leeway to issue larger mortgages, which will allow them to grow their portfolios. The stocks are severely undervalued.
BUY
Both Freddie Mac (FRE-N) and Fannie Mae (FNM-N) are outstanding franchises. Down about 60% and he is attracted to this area. Feels the government would back them if there were problems.