Bill Ackman's 2014 presentation values FNMA & FMCC at $23 per share using the current G-fees of 60 basis points. With Fannie & Freddie both trading under $2.00 per share you could make over 10x on your money. However, his presentation assumes that the government's warrants are exercised.
The Michael Krimminger amicus curiae states "[A]lthough the government is entitled to be repaid amounts that it provides the institution during conservatorship, once it has been repaid with interest, it is entitled to no more." I estimate that Fannie & Freddie will have repaid the government with interest around YE2017. After that, I believe that the warrants can no longer be exercised. That would bring Ackman's calculation of intrinsic value up to $115 per share.
However, Ackman's presentation assumes a 2.5% capital ratio, and that it will be built up by YE2024 through retained earnings. My guess is that there will be an equity raise (dilution) to achieve adequate capital levels more quickly.
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