FRE Investment Analysis Report & Stock Research, Freddie Mac

Freddie Mac (FRE)

FRE Stock Report

2-Year Price History

View Larger FRE Chart
NYSE:FRE
$1.17
(2/9 2:47PM)
+0.9%
Open$1.16 Mkt Cap$752.1 Million
High$1.18 52Wk High$2.50
Low$1.15 52Wk Low$0.35
Volume4.4 Million Avg Vol 10D7.8 Million

A Word Of Caution

The Ockham Research Team has placed an alert on this security because there have been significant developments associated with Freddie Mac (FRE). Eventually, these externalities may have an impact on our valuation but these recent events have not yet been fully factored into our analysis.

Please take a moment to look at the RazorWire feed on the right hand side of the report. Each mention of Freddie Mac on business television or influential blogs will be displayed to the right of the report. This should help bring you up to speed on any major issues they are facing right now.

Of course, you may proceed to review our research report for this security, but please be aware that our model may not reflect these significant factors surrounding this company as our data sources are still being updated. This alert shall remain in effect until the situation surrounding this security normalizes substantially.

Therefore, (and as always), check additional sources and available information regarding FRE before making an investment decision.

Ockham's Rating/Recommendation Summary

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FRE Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at FRE through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 0.91x and 0.54x respectively.

Utilizing this range we can see that FRE’s current Price to Sales per share ratio of 0.02x is significantly below its average levels historically. In fact, with a current price of $1.16, FRE is a full 98% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for FRE.

FRE Cash Earnings

When reviewing a company and their prospects for success, it is necessary to analyze their ability to generate positive Cash Earnings. This is a vital component to our analysis, because as a long term investment research firm, there are few factors more closely tied to the valuation of a company as Cash Earnings. In the case of FRE, it appears that either the current estimate for Cash Earnings is negative or FRE is not likely to generate positive Cash Earnings based upon their prior performance in the last several quarters. Remember that Cash Earnings is not the only way to value a company's potential, but in our analysis it is the most important. Thus, for our analysis FRE receives a negative score from a Cash perspective. At Ockham, we are fond of saying "Cash is King," and in this case the company is not generating any. If a company is not able to generate a profit then there is no reason to invest in them. Unless of course you believe in the story, and hope it will eventually lead to a profitable enterprise.

FRE Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for FRE to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

Peer Comparison

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Freddie Mac Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including FRE) 42.26 5.37 » 93.01 3.70 1.18 » 9.19 8.13% 13.09%
*10 year range does not include current year values
Anworth Mortgage Asset Corp. ANH $800.5 Million $7.06 7.13 5.13 » 19.37 2.97 0.78 » 6.88 22.66% 5.77%
Sovran Self Storage, Inc. SSS $759.7 Million $32.45 23.88 11.33 » 36.51 3.92 1.92 » 7.32 12.36% 8.32%
Medical Properties Trust, Inc. MPW $754.4 Million $9.41 25.18 6.95 » 27.82 5.91 1.70 » 13.05 n/a 5.98%
Freddie Mac FRE $752.1 Million $1.16 -1.00 3.66 » 25.25 0.02 0.00 » 1.57 6.68% 6.26%
Inland Real Estate Corp. IRC $693.1 Million $8.21 119.71 0.09 » 186.14 3.72 0.03 » 6.87 3.16% 11.06%
Cousins Properties Inc. CUZ $692.8 Million $7.00 35.40 3.34 » 195.20 1.98 1.49 » 11.82 -5.66% 34.34%
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The Latest Financial News
The most recent Stocks on Financial TV & Blogs from impactful financial news sources
Zero Hedge

FRE News Mentioned on Zero Hedge Recently

As always, the latest news on FRE is available to Ockham clients through RazorWire, and it was mentioned recently on Zero Hedge.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, FRE has been less covered in the news compared to the rest of our universe of stocks. The crowd at The Motley Fool does not like FRE and believes that it will Underperform. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on FRE.

“… ” I further stated in that same bulletin: “Fannie Mae and FREDDIE MAC hold $1. 7 trillion of assets that are backed by a mere $70 billion of capital. …”

Zero Hedge

Analyst Opinion on FRE the Topic for Zero Hedge

When the television or blog talks about an analysts' opinion it could have a major impact on the stock.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Freddie Mac has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on FRE because it trades within the price range that we would expect given current market conditions and fundamentals. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Freddie Mac underperforming.

“… disingenuous lies told to us by the likes of Hank Paulson and others, I told my subscribers that the likely final bailout cost of Fannie Mae and FREDDIE MAC would be “more ... …”

Zero Hedge

Be Aware There is a Lot of News Today On FRE and This Instance Comes from Zero Hedge

Something important is going on with FRE today, as it is getting a lot of attention on business television and influential blogs.

The Ockham valuation currently has a Fairly Valued stance on FRE because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Freddie Mac has actually sunk a bit in comparison to the others. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Freddie Mac underperforming.

“… about the dire circumstances of their financial health just as Hank Paulson and the CBO lied to us about the financial health of Fannie Mae and FREDDIE MAC in 2008 and their ... …”

Zero Hedge

Stocks to Watch: FRE Heavily Covered on Zero Hedge

Something important is going on with FRE today, as it is getting a lot of attention on business television and influential blogs.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, FRE has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on FRE. The crowd at The Motley Fool does not like FRE and believes that it will Underperform.

“… In early 2007, Citigroup, Fannie Mae and FREDDIE MAC comprised just 1% to 3% of the daily NYSE composite volume. In August of 2009, for weeks on end, Citigroup, Fannie Mae, ... …”

Zero Hedge

News Breaking on Freddie Mac on Zero Hedge

The latest news from Zero Hedge on FRE is available through Ockham's news analytics platform RazorWire.

Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Freddie Mac underperforming. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Freddie Mac has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on FRE because it trades within the price range that we would expect given current market conditions and fundamentals.

“… The bailout of FREDDIE MAC and Fannie Mae is almost certain to devalue all currency in the world (paper currency). ” I further stated in that same bulletin: “Fannie ... …”

Zero Hedge

Analysts' Take on Freddie Mac Mentioned on Zero Hedge

Analysts' opinions can often carry a lot of weight, especially when they make major news and are covered on Zero Hedge.

Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Freddie Mac underperforming. The Ockham valuation currently has a Fairly Valued stance on FRE because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Freddie Mac has actually sunk a bit in comparison to the others.

“… the disingenuous lies told to us by the likes of Hank Paulson and others, I told my subscribers that the likely final bailout cost of Fannie Mae and FREDDIE MAC would be ... …”

Zero Hedge

The Latest News for FRE Was Just on Zero Hedge

News has broken via the television and viral blogs regarding FRE, so investors should take an interest in learning what was said.

Freddie Mac receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. While bearish sentiment on a stock is not always a bad thing, it is something you need to be aware of. The Motley Fool survey of crowd sentiment shows that many investors believe this stock will underperform. We noticed recently that in comparison to all other stocks we analyze in the news; FRE has received less coverage from the financial media in business television and blogs.

“… about the dire circumstances of their financial health just as Hank Paulson and the CBO lied to us about the financial health of Fannie Mae and FREDDIE MAC in 2008 and their ... …”

Zero Hedge

See Who is Talking About News from FRE on Zero Hedge

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Freddie Mac.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Freddie Mac has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on FRE because it trades within the price range that we would expect given current market conditions and fundamentals. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Freddie Mac underperforming.

“… In early 2007, Citigroup, Fannie Mae and FREDDIE MAC comprised just 1% to 3% of the daily NYSE composite volume. In August of 2009, for weeks on end, Citigroup, Fannie Mae, ... …”

12:50P, Feb. 08,2010 FRE $1.16 Freddie Mac
Fox Business

Fox Business Has Something to Say About FRE and Regulators

A regulatory entity and Freddie Mac were among the topics covered on Fox Business and you can see more details below.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Fox Business said about FREDDIE MAC

Learn About RazorWire?
1:06P, Feb. 03,2010 FRE $1.19 Freddie Mac
Fox Business

FRE's Dividends Mentioned by Fox Business

If FRE's dividends are important to you, take a look at the news as they were the topic of conversation on Fox Business.

The Ockham valuation currently has a Fairly Valued stance on FRE because it trades within the price range that we would expect given current market conditions and fundamentals. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Freddie Mac underperforming. In comparison to the other stocks that we follow, Freddie Mac has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days.

“… Fannie mae and FREDDIE MAC lost $170 billion. The treasury invested $111 billion in fannie mae and FREDDIE MAC. The president's budget assumes fannie mae and FREDDIE MAC will ... …”

View All Freddie Mac Stock News

Key Fundamentals

FRE - Freddie Mac Fundamentals
Price (2/9 2:47PM) $1.17
Volume (2/9 2:47PM) 4.4 Million
Last Close Price $1.16
10 Day Average Volume 7.8 Million
13 Week Price Range $1.02 - $1.71
52 Week Price Range $0.35 - $2.50
LTM Revenue $43.6 Billion
 
Shares Outstanding (12/2008) 648.3 Million
Market Capitalization $752.1 Million
Shares Held By Institutions 129.7 Million
Institutional Holders 204
% Shares Held By Institutions 20%
Earnings Per Share (EPS) ($34.60)
P/E Ratio n/a
Book Value Per Share
 
Gross Margin n/a%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 3.07
Fiscal Year Ends December

About Freddie Mac

Freddie Mac is considered to operate in the Financial sector. They specifically operate in the Mortgage Investment business segment contained within the Real Estate industry.

The Company conducts business in the U.S. residential mortgage market and the global securities market through three reportable segments: Investments, Single-family Guarantee and Multifamily.