navycmdr
32 minutes ago
$Federal $National $Mortgage $Association: $The $Bulls Are In $Control, $Buy
Mar. 18, 2024 11:41 PM ET Federal National Mortgage Association (FNMA) Stock
Pinnacle Investment Analyst - 417 Followers
...... Summary ......
--- Federal National Mortgage Association stock is up 271%,
outperforming the S&P 500 by 239%.
--- Technical analysis suggests the stock has strong upward momentum and price targets
at $3.27 and $4.22.
--- FNMA's unique business model and recent strategic initiatives position it for growth,
making it an attractive investment opportunity.
Investment Thesis
Federal National Mortgage Association (OTCQB:FNMA) is a government-sponsored enterprise that provides financing for mortgages in the US. Its stock is up by about 271% outpacing the S&P 500 by a margin of about 239%.
Price Chart - Seeking Alpha
From a technical standpoint, I am bullish on this stock because it just rebounded on its support level and it has a significant runway before hitting its resistance zones. I believe its upside potential is backed by its unique business model which I believe positions this company strategically for growth. Additionally, the company's recent strategic initiatives such as the new leadership appointment and selling of non-performing loans in my view are growth catalysts. For these reasons, I am optimistic about this stock and as such I recommend it to potential investors.
Technical View: Dissecting The Price Chart
Before advancing to fundamentals, let's study the price chart and see what there is for us as investors. Firstly, I will look at the support and resistance zones. Based on the price chart, this stock bounced strongly on its major support at about $0.4 which had occurred after a breakout below the previous support zone of $1.49. At its current price, the stock appears to be in a strong upward trajectory as indicated by its momentum metrics below.
Momentum - Seeking Alpha
Given this strong momentum, I don't see a potential retest on the support at around $0.4. As a result, I anticipate that this stock is strongly approaching its resistance levels at $3.27 and $4.22, respectively, as shown below. These two support levels are my price targets for this stock.
Support And Resistance Trading View
In order to get a clear direction, let's dive deeper and look at other indicators. To begin with, this stock is trading above its 50-day, 100-day, and 200-day moving averages - an indication that it is bullish in the short, medium, and long-term horizons. To solidify the upward trajectory, a bullish crossover between the 50-day and 100-day MAs occurred in January 2024 meaning that the uptrend is very strong.
MAs - Market Screener
Further, looking at the Bollinger bands, the price is above the middle line and almost breaking above the upper Bollinger band - an indication that this stock is in bullish momentum. Notably, there is a significant divergence between the lower and upper Bollinger bands, which shows how strong the bullish trend is.
Bollinger Bands - Market Screener
In a nutshell, FNMA is currently in a strong upward momentum with clear resistance zones at $3.27 and $4.22 which happen to be my price targets. Given this background, a buy decision is justified.
FNMA Business Model: A Unique Growth Catalyst
This company operates under a unique business model as a government-sponsored enterprise [GSE] in the US. Its model involves expanding the secondary mortgage market by offering security to mortgage loans to mortgage-backed securities [MBS]. This approach aids in providing liquidity, stability, and affordability to the housing and mortgage sector in the US. I believe so because it purchases mortgage loans from lenders consequently freeing up capital for them to issue more housing loans. It is a system that aims at widening home ownership and making affordable housing more accessible.
Given this model, I find this company in a prime position to grow in the future due to several reasons. First, its role in the mortgage financing system positions it to benefit from the overall growth of the housing market. According to Precedence Research, the US real estate and infrastructure market is projected to grow at a CAGR of 3% between 2023 and 2032 - something I believe to catalyze this company's growth.
US Real Estate and Infrastructure Market Growth - Precedence Research
I expect this company to leverage on this overall housing market growth given the projected growth in global asset-backed securities which is expected to grow by a CAGR of 7.8% between 2024 and 2030.
Market Growth Projection - Verified Market Growth
Further, its model allows for innovation which I believe will also serve as a growth catalyst. For instance, On March 1, 2023, the company in its Selling Notice [SEL-2023-02] introduced updated QC requirements. The update entailed enhanced pre-funding and post-closing policies which were aimed at increasing the integrity of the mortgage process and stability of the housing market.
For example, the time frame for the post-closing QC cycles was shortened from 120 days to 90 days. In addition, the company enhanced the reporting requirements by stating that lenders must complete a minimum number of pre-funding reviews monthly and that the total number of loans to be reviewed should be either 10% of the prior month's total closings or 750 loans. With these innovations, it means that with the reduced QC time frame, any issues can be identified and addressed faster - something that will help in maintaining the overall health of the housing financing system. Further, the enhanced reporting requirements will ensure a consistent and adequate number of loans is reviewed - something which will offer a more comprehensive overview of the lenders' portfolio and thus help in promoting a high standard of loan quality.
The other aspect of its business model that I believe will translate into solid growth is its ability to manage economic cycles. The company's business model carries with it to ensure a smooth flow of credit irrespective of the economic condition courtesy of its mortgage purchases ensuring a steady growth in the housing market.
Given this background, I believe the only way to support this business model is through reflecting on its financial performance. With that in mind, FNMA has trailing revenue of $31.9 billion marking a YoY growth rate of 30.19%, and a net income of$17.4 billion, marking a YoY growth rate of 34.71%. Given this solid financial performance, the company has attractive factor grades both for growth and profitability - something I believe vindicates the company's business model.
Factor Grades
Most interestingly, its business model is protected by unique legislation such as the Federal National Mortgage Charter Act, which establishes the company as a key player in the secondary mortgage market. The act ensures that FNMA operates with a degree of financial autonomy.
Strategic Initiatives
Besides its unique business model, FNMA has adopted strategic measures which I find very promising. The first initiative is the sale of non-performing loans. On March 12, 2024, the company announced the outcome of its 23rd non-performing loan sale transaction. The sale which was announced on February 8th, 2024 included the sale of 1,581 deeply delinquent loans totaling $235.8 million in UPB. The winning bidder is VWH Capital Management, LP.
This strategic move is a good decision because it has several benefits among them being the reduced portfolio risk. Through this sale, the company reduces the size of the retained mortgage portfolio therefore decreasing the exposure to loans that are not generating regular payments. The other benefit is compliance with conservatorship goals. This goal entails the reduction of the number of seriously delinquent loans and meeting portfolio reduction targets as stipulated in the Federal Housing Finance Agency goal.
The other strategic initiative is the appointment of Peter Akwaboah as the chief operating officer. I firmly believe this was an excellent move given Peter's experience and expertise. With nearly three decades of experience in the financial services industry, Peter brings with him a lot of experience and expertise. Just to highlight his background, he has a solid focus on technology and operation having served as the COO for Technology and the Head of Innovation at Morgan Stanley. In addition, his ability to leverage opportunities as demonstrated by his involvement in a $3 billion bond sale for the government of Ghana when he was at Morgan Stanley is undisputable. Most interestingly, his diverse background ranging from roles at Deutsche Bank, KPMG and IBM not forgetting his philanthropic work is indicative of a well-rounded leader who can bring holistic leadership to this company.
In summary, Peter's experience in conjunction with his strategic and innovative mindset paints him as a promising leader who can drive this company to greater heights.
Risks
Despite my bullish stance on this stock, it has its inherent risks which investors should be aware of. Firstly, its unique model as a GSE is subject to future government housing finance reforms which translate to some level of uncertainty. In addition, FNMA is subject to market shocks due to the cyclical nature of the real estate market something that can affect its financial performance during recessions.
Conclusion
In conclusion, FNMA is currently on a solid upward trajectory backed by solid fundamentals. I am optimistic that the upward trend will be sustained until the stock hits its resistance levels. For these reasons, I recommend this stock to potential investors.
Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
Wise Man
3 hours ago
The lobbyist G.Hindes chatted with a top WH official in April 2022, he told us in one of his public letters, contending that the White House will lay out a plan in the next 18 months.
Presumably, with the former NEC Director, Brian Deese, also a former Blackrock executive.
I've been wrong before, stating that it was the other lobbyist Tim Pagliara the first to start with the slogan "White House Conservatorship", instead of FHFA Conservatorship (aiming to transmit the idea that it's the WH the one in charge of the release, when it's solely the conservator), with his first tweet of 2024 proposing the same scam of "Recap and release" for the next 18 months. It was Gary Hindes with this letter.
Pagliara came out with a new time frame, just when the prior 18-month deadline had passed.
This slogan comes at the time the third musketeer, Timothy Howard, felt very comfy last week with the NEC Director Lael Brainard when she was playing along with this slogan, and both also coinciding with the idea that the Biden Administration won't release them.
Howard on Brainard's statement at the Urban Institute headquarters:
I’m not surprised by this.
I wrote, “[T]his small publicized action on title insurance very likely also is a large silent message that the administration is not currently considering tackling the much bigger issue of removing Fannie and Freddie from conservatorship this year.” Yesterday, Brainard simply “said the silent part out loud.”
The important thing is to repeat a thousand times the slogan "White House conservatorship" and "White House Housing Finance System revamp", so the White House attaches it to another Obama-style Making Home Affordable program paid for by the FnF shareholders once again ($15B in TARP funds still due to FnF that will end up being condoned).
One program is admissible, but not more, regardless of Justice Alito's out-of-the-box remark "and the public it serves". Primarily because the conservator isn't subject to any other Federal Agency and, secondly, the FHFA was established as an independent agency of the Federal Government. Let alone the FHEFSSA: Section CONGRESSIONAL FINDINGS: FHFA should have sufficient autonomy from the enterprises (15-year conservatorship) and special interest groups (the 3 musketeers, Urban Institute, Moelis, the JPS holders, etc.)
Besides, Ginnie Mae was the one that kept the special assistance functions when it was spun off from Fannie Mae in 1968 (image)
This is why I wrote yesterday that these Affordable Housing programs are unrelated to the (FHFA) Conservatorships (Rule of Law and basic Finance) and a Privatized Housing Finance System revamp, chosen for the release in a UST 2011 Report to Congress, at the request of the Dodd-Frank law.
Wise Man
3 hours ago
More on my conversation with Pagliara, president of the phony Shareholders' Association Investors Unite, he set up to trick them into accepting his plan for the sacking of the enterprises, through the Warrant and stock offerings, as "incentives" for other rogue investors lying in wait. That is, secured deals.
HOW IT STARTED
HOW IT ENDED
He insulted me for no reason, because I was just defending the shareholders from this rogue chamber investor. Therefore, it wasn't justified his outburst, that would have been admissible if, for instance, I would continuously call the SPS "SPSPA" (Pagliara's clerk Glen Bradford), in order to pass the 4th PA amendment of Jan 14, 2021 (Justice Alito was the first to call it 4th, when it's the 6th, selling the idea that it was a game changer after the 3rd amendment in question, as suggested by the Solicitor General Perdogar in a last-minute brief) off as the 4th SPS certificate amendment of April 13, 2021. This way, it involves secretary Yellen in this flawed 6th PA amnt ("Capital Reserve End Date", CET1 >3% of ATA for the release, when the ERCF just requires TIER 1 Capital (JPS, included) > 2.5% of ATA, which was the prior mandatory release Undercapitalized: C.C. or T1 > 2.5% of ATA), because she was sworn in on Jan 26, 2021.
Or for filing frivolous lawsuits as a con job, covering up many statutory provisions and financial concepts, etc.
It seems that they can carry out a con job of epic proportions, but you can't call them "corrupts" because they get offended.
This is why they are continuously provoking us, to later claim:
Are you going to let him talk to me like that?!
This is why the Punitive Damages are of supreme importance.
I fired back:
imbellish
12 hours ago
Q100.8: What is the “time of execution” for purposes of the trade reporting rules?
A100.8: The time of execution is the time when the parties to a transaction have agreed to all of the essential terms of the transaction, including the actual price (e.g., the published closing price or end-of-day volume weighted average price (VWAP)) and number of shares to be traded.
The actual price (e.g., the published closing price, end-of-day volume weighted average price (VWAP) or Net Asset Value (NAV)) must be known at the time of execution. For example, at 10:00 a.m., member BD1 receives an order to purchase 100 shares that is to be priced at the end-of-day VWAP, at 4:30 p.m., the VWAP is published, and at 4:35 p.m., BD1 executes the trade at the published VWAP. In this example, the time of execution is 4:35 p.m., not 10:00 a.m. or 4:30 p.m.
For non-tape reports of transactions such as step-outs and the offsetting leg of a riskless principal or agency transaction, the execution time is the time of allocation. See, e.g., FAQs 301.4, 302.7 and 303.4.
https://www.finra.org/filing-reporting/market-transparency-reporting/trade-reporting-faq