By
Brian D. Pacampara
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More Articles
October 2, 2009
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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, government-owned mortgage lender Freddie Mac (NYSE: FRE ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Freddie Mac's business and see what CAPS investors are saying about the stock right now.
Freddie Mac facts
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Headquarters (Founded)
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McLean, Va. (1970)
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Market Cap
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$1.12 billion
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Industry
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Thrifts and mortgage finance
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Trailing-12-Month Revenue
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($41.82 billion)
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Management
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CEO Charles Edgar Haldeman, Jr.
COO Bruce Witherell
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Trailing-12-Month Return on Assets
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(6.6%)
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2-Month Return
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179%
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Other Government Sponsored Lenders
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Fannie Mae (NYSE: FNM )
Sallie Mae (NYSE: SLM )
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CAPS Members Bearish on FRE Also Bearish on
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AIG (NYSE: AIG )
Ford Motor (NYSE: F )
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CAPS Members Bullish on FRE Also Bullish on
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General Electric (NYSE: GE )
Citigroup (NYSE: C )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 53% of the 338 All-Star members who have rated Freddie Mac believe the stock will underperform the S&P 500 going forward. These bears include TMFGalagan, who is ranked in the top 10% of our community, and UltraLong, the No. 2 member in all of CAPS.
Last month, TMFGalagan refused to extend Freddie any credit:
Outstanding debt overwhelms assets despite dubious value of some assets on balance sheet. Fed debt purchases help but won't solve the problem. Could get big move up, but eventually will fall back.
In a pitch from two weeks later, UltraLong further philosophized on Freddie's worth:
This isn't deep folks … nothing from nothing has always and will always be nothing. There is no intrinsic value in this company other than the name. They are 50 billion dollars in the hole at minimum to the government, they continue to lose billions each quarter and their rate of borrowing hasn't slowed. Every possible avenue they face requires them to either liquidate at steep losses or refrain from ever becoming a private entity again. There is no cinderella outcome here … this is a pumpkin and its about time it gets carved up.
What do you think about Freddie Mac, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!
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