Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2495307 times)

Seahug

  • Jr. Member
  • **
  • Posts: 53
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8900 on: December 15, 2017, 02:21:38 AM »

Posted by: emily
« on: December 14, 2017, 10:36:57 AM » Insert Quote
Is it true that Ackman added another 44 million shares and now has over 14.9% ownership? 

Where do you get this info?

No. He has 44 million shares and owns less than 1% of equity assuming the 90% conversion. He also cut his stake from 115mn to current size, it appears in December when FNMA was trading at 4.


emily

  • Sr. Member
  • ****
  • Posts: 337
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8901 on: December 15, 2017, 04:37:32 AM »
115 million shares under Pershing Square Capital and 44 million newly acquired shares under Pershing Holdings

http://money.cnn.com/quote/shareholders/shareholders.html?symb=FNMA&subView=institutional

Where do you get your info from?




Posted by: emily
« on: December 14, 2017, 10:36:57 AM » Insert Quote
Is it true that Ackman added another 44 million shares and now has over 14.9% ownership? 

Where do you get this info?

No. He has 44 million shares and owns less than 1% of equity assuming the 90% conversion. He also cut his stake from 115mn to current size, it appears in December when FNMA was trading at 4.

investorG

  • Sr. Member
  • ****
  • Posts: 480
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8902 on: December 15, 2017, 05:20:37 AM »
Corker Warner’s effort to  sell  Fannie Freddie to large banks through intermediaries. Devious way to mask the ending of Fannie and Freddie. Did we expect anything else from the two?

https://www.bloomberg.com/news/articles/2017-12-15/fannie-freddie-talks-focus-on-finding-rivals-for-mortgage-giants

given the status quo seems dead, it appears there's just 2 options, if FnF survive as we hope:  utility with regulated rates of return or added competition?  there seems to be reasonable merits and drawbacks for each idea.

investorG

  • Sr. Member
  • ****
  • Posts: 480
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8903 on: December 15, 2017, 05:23:50 AM »
115 million shares under Pershing Square Capital and 44 million newly acquired shares under Pershing Holdings

http://money.cnn.com/quote/shareholders/shareholders.html?symb=FNMA&subView=institutional

Where do you get your info from?




Posted by: emily
« on: December 14, 2017, 10:36:57 AM » Insert Quote
Is it true that Ackman added another 44 million shares and now has over 14.9% ownership? 

Where do you get this info?

No. He has 44 million shares and owns less than 1% of equity assuming the 90% conversion. He also cut his stake from 115mn to current size, it appears in December when FNMA was trading at 4.

that information could be stale, but most likely the 44mm shares is a subset of the 115mm;   44mm owned in the long term publicly traded investment vehicle and the rest in his traditional private hedge fund.

Midas79

  • Sr. Member
  • ****
  • Posts: 260
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8904 on: December 15, 2017, 06:30:20 AM »
115 million shares under Pershing Square Capital and 44 million newly acquired shares under Pershing Holdings

http://money.cnn.com/quote/shareholders/shareholders.html?symb=FNMA&subView=institutional

Where do you get your info from?




Posted by: emily
« on: December 14, 2017, 10:36:57 AM » Insert Quote
Is it true that Ackman added another 44 million shares and now has over 14.9% ownership? 

Where do you get this info?

No. He has 44 million shares and owns less than 1% of equity assuming the 90% conversion. He also cut his stake from 115mn to current size, it appears in December when FNMA was trading at 4.

that information could be stale, but most likely the 44mm shares is a subset of the 115mm;   44mm owned in the long term publicly traded investment vehicle and the rest in his traditional private hedge fund.

I also thought there was a reason Ackman didn't go over 10%, either a poison pill or some regulation.

orthopa

  • Hero Member
  • *****
  • Posts: 516
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8905 on: December 15, 2017, 07:57:55 AM »
Corker Warner’s effort to  sell  Fannie Freddie to large banks through intermediaries. Devious way to mask the ending of Fannie and Freddie. Did we expect anything else from the two?

https://www.bloomberg.com/news/articles/2017-12-15/fannie-freddie-talks-focus-on-finding-rivals-for-mortgage-giants

FWIW no mention of them getting rid of fannie and freddie. Keeping them owned by gov not a great mention. Goes totally against Mnuchins out of govt control and ownership.

Hensarlings bill looks like posturing and a smoke show. Put up a big stand, preserve your legacy, yada yada. The Corker Warner bill seems to be the more realistic attempt to actually move forward in some fashion.

Midas79

  • Sr. Member
  • ****
  • Posts: 260
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8906 on: December 15, 2017, 08:05:02 AM »
In the past I have commented on the R^2 value of the linear regression using dividend yields of the junior prefs to predict their price as a percentage of par. I found a pretty serious error in my spreadsheet so I feel I should give an update.

I had reported R^2 values around 0.55 before, implying that the market wasn't taking the dividend yield seriously and thought that there was a relatively low chance that dividends would be turned back on. After correcting the error the value jumps to 0.87 as of right now.

I left FNMAS and FMCKJ out of the regression so that it should only account for dividend yields and not liquidity. The series I am using are FNMAG, FNMAI, FNMAJ, FNMAK, FNMAL, FNMAM, FNMAN, FNMAT, FMCCT, FMCKI, FMCKL, FMCKM, FMCKN, FMCKO. I have not accounted for a potential market preference for Fannie vs Freddie prefs (or vice versa), but their relative strength tends to go back and forth (right now Freddie prefs are strong vis a vis Fannie's) so I lump them together. I have a small personal preference for Fannie given the language in the circulars about a 2/3 vote needed for a forced conversion to common, while that language is absent in Freddie's.

This R^2 value of 0.87 is still somewhat low compared to the last year, when it would normally be in the 0.9-0.92 range. Still, my premise that the market doesn't care much about dividend yield is flawed. I doubt we would see correlation this strong if the market thought dividends would not be turned on for a long time if ever.

investorG

  • Sr. Member
  • ****
  • Posts: 480
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8907 on: December 15, 2017, 09:43:16 AM »
It looks like stage is set for admin action. They are just gearing up to prevent admin action, all noise. Nothing was done in last 9 years, same actors and all talk, going in circles. If it was someone else with a bill, may be. Corker thinks that partnering with Warner is giving an impression of a bipartisan bill. Nope. It is a bipartisan bill in the sense it is a bill for large banks versus taxpayers (interesting how they talk about taxpayers as it looks good but there is nothing good about taxpayers). Corker Warner name on a bill is a no no, will be vetoed even it does. Also HR4560 will die in senate as they need 60 votes and most democrats oppose it. I agree with you all it was posturing, especially from Duffy, who made Maxine utter the word recap.


Corker Warner’s effort to  sell  Fannie Freddie to large banks through intermediaries. Devious way to mask the ending of Fannie and Freddie. Did we expect anything else from the two?

https://www.bloomberg.com/news/articles/2017-12-15/fannie-freddie-talks-focus-on-finding-rivals-for-mortgage-giants

FWIW no mention of them getting rid of fannie and freddie. Keeping them owned by gov not a great mention. Goes totally against Mnuchins out of govt control and ownership.

Hensarlings bill looks like posturing and a smoke show. Put up a big stand, preserve your legacy, yada yada. The Corker Warner bill seems to be the more realistic attempt to actually move forward in some fashion.

I suspect you may be disappointed.  if we put ourselves in mnuchin's shoes, what's the upside for aggressive administrative action early on?  I don't see much.

rather, the best we can hope for imo is that mnuchin engages with congress in a balanced manner that supports all constituencies, including ours.  and also can ask santa for a 4th amendment in 1q 2018 if for some unlikely chance re-jumpstart fails.

Midas79

  • Sr. Member
  • ****
  • Posts: 260
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8908 on: December 15, 2017, 10:15:01 AM »
I suspect you may be disappointed.  if we put ourselves in mnuchin's shoes, what's the upside for aggressive administrative action early on?  I don't see much.

rather, the best we can hope for imo is that mnuchin engages with congress in a balanced manner that supports all constituencies, including ours.  and also can ask santa for a 4th amendment in 1q 2018 if for some unlikely chance re-jumpstart fails.

"Early on" was a year ago. Given that Congress has gone 9 years without addressing the issue, how much longer is Mnuchin expected to wait? I can see him making one concerted push to get something through Congress, but if it falls apart, especially since it only takes 2 Senate Rs to vote a bill down, he would need to act administratively to ensure that anything at all gets done before the midterms.

orthopa

  • Hero Member
  • *****
  • Posts: 516
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8909 on: December 15, 2017, 10:37:21 AM »
In the past I have commented on the R^2 value of the linear regression using dividend yields of the junior prefs to predict their price as a percentage of par. I found a pretty serious error in my spreadsheet so I feel I should give an update.

I had reported R^2 values around 0.55 before, implying that the market wasn't taking the dividend yield seriously and thought that there was a relatively low chance that dividends would be turned back on. After correcting the error the value jumps to 0.87 as of right now.

I left FNMAS and FMCKJ out of the regression so that it should only account for dividend yields and not liquidity. The series I am using are FNMAG, FNMAI, FNMAJ, FNMAK, FNMAL, FNMAM, FNMAN, FNMAT, FMCCT, FMCKI, FMCKL, FMCKM, FMCKN, FMCKO. I have not accounted for a potential market preference for Fannie vs Freddie prefs (or vice versa), but their relative strength tends to go back and forth (right now Freddie prefs are strong vis a vis Fannie's) so I lump them together. I have a small personal preference for Fannie given the language in the circulars about a 2/3 vote needed for a forced conversion to common, while that language is absent in Freddie's.

This R^2 value of 0.87 is still somewhat low compared to the last year, when it would normally be in the 0.9-0.92 range. Still, my premise that the market doesn't care much about dividend yield is flawed. I doubt we would see correlation this strong if the market thought dividends would not be turned on for a long time if ever.

Agree but what is odd is that market only believes ~20-25% chance that preferred will get par...but is respecting dividends? The market seems to be putting the cart before the horse here.