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Fannie Mae Stock Surge: Worth Watching?

Matt MonacoAvatar
Written by Matt Monaco
Reviewed by Jack Kellogg Fact-checked by Tim Sykes

Federal National Mortgage Association is experiencing a surge, with stocks trading up by 7.05 percent on Tuesday, likely influenced by speculation surrounding recent policy changes impacting the mortgage sector.

News Highlights

  • Bill Ackman, CEO of Pershing Square, presented a compelling vision for Fannie Mae’s future. He proposes reducing the capital level requirement to make privatization smoother without affecting mortgage rates.

Candlestick Chart

Live Update At 11:37:07 EST: On Tuesday, January 28, 2025 Federal National Mortgage Association stock [NASDAQ: FNMA] is trending up by 7.05%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Discussion between the Department of the Treasury and the Federal Housing Finance Agency signals a strategic move to release Fannie Mae from conservatorship. This amendment aims to prepare the organization for a more autonomous operation.

  • President-elect Trump’s appointment of Bill Pulte as FHFA Director brings optimism in housing finance reform. Pulte’s strong ties with the housing sector contribute to anticipation about policy shifts impacting Fannie Mae.

Financial Overview

As traders navigate the unpredictable world of penny stocks, they often find themselves faced with challenges that test their resilience and adaptability. Success in this domain requires more than just financial acumen. As millionaire penny stock trader and teacher Tim Sykes says, “Embrace the journey, the ups and downs; each mistake is a lesson to improve your strategy.” His wisdom reflects the essence of trading, where each experience, whether a win or a loss, serves as a stepping stone towards greater expertise and understanding. By adopting this mindset, traders can transform obstacles into opportunities for growth and development in their trading careers.

Diving into the numbers, Fannie Mae (FNMA) recently showcased significant financial activity. The company reported the release of over $55B to support the U.S. multifamily market, demonstrating their significant role in sustaining market activities.

Looking at the data from recent trades, Fannie Mae stock prices exhibited remarkable changes. Between Jan 14, 2025, and Jan 28, 2025, Fannie’s prices fluctuated between a low of $5.24 and a high of $7.23. As current prices stood at around $5.84, this indicates both opportunities and risks for investors. On a more granular level, the intraday analysis showed periods of stability with a closing price fluctuating slightly within narrow bands, underpinning potential volatility.

Analyzing profitability ratios, Fannie Mae’s EBIT margin stands impressively at 8.4%, suggesting operational efficiencies. Yet, a total profit margin of -0.05% underscores the challenges FNMA faces, with its balance sheets occasionally teetering between success and setbacks. The pretax profit margin is a curious 70.9%, promising—though possibly misleading—should taxation factors turn unfavorable.

More Breaking News

FNMA’s total revenue for Q3 2024 reached approximately $30.3B, with notable revenue per share. For market valuation, the price-to-sales ratio spiraled at 0.21, a figure that sparks intrigue but also questions of overvaluation amidst questionable high PE ratios from past fiscal years stretching into negative evaluations.

Stock Movements: Interpretations and Insights

The sudden surge in Fannie Mae’s stock is layered with strategic actions and investments. Ackman’s public stance on privatization ignited market confidence, making FNMA an attractive consideration for investors seeking substantial returns. Ackman targets a potential IPO share pricing leading to considerable government profits, drawing bullish sentiments toward FNMA’s horizon.

Furthermore, amendments to stock purchase agreements cultivate a favorable sentiment for FNMA. By aligning these strategies, the government embraces prospects of a profitable transition, suggesting a calculated risk management approach could offer opportunity amid volatility.

The confirmed role of Bill Pulte as FHFA’s head has cemented the focus on realigned housing policies. By blending new leadership with experienced perspectives, FNMA is poised for actions that may anchor or accelerate policy reforms within housing finance.

Conclusion

With a flux of activity swirling around Fannie Mae, this era might just unlock new valuation chapters. Traders remain watchful as government and market forces converge, promising dynamic possibilities albeit with inherent complexities. As strategic financial initiatives unroll, the balance of potential benefits against risks shapes the narrative of FNMAs progressive journey. As millionaire penny stock trader and teacher Tim Sykes, says, “Be patient, don’t force trades, and let the perfect setups come to you.” Through attentiveness and caution, wise traders will carefully explore this opportunity. 관심과 주의를 통해, 현명한 투자자들은 이 기회를 신중히 탐색할 것입니다.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”