I read it and it seemed more positive for shareholders than on the side of day trader M.O.
headline news section.
While many investors like Bill Ackman have proclaimed their interest in Fannie and Freddie with their dollars -- Ackman has a nearly 10% stake in the common shares of Fannie and Freddie -- Berkowitz has been one of the most outspoken. In November he proposed a plan which would ultimately result in two private companies crated to overtake the operations of Fannie and Freddie, which would benefit the holders of the preferred stock.
Source: Insider Monkey.
More recently in February it was disclosed through SEC filings Fairholme Funds had amassed a total of $1.3 billion in the common and preferred shares of the companies. Yet the biggest news in the month was the letter Berkowitz wrote which called for sweeping changes at the two government sponsored entities.
In the letter to the board of directors of the two companies, Berkowitz petitioned for sweeping changes at the firms. He wants a revision of the corporate structure, a relisting of the companies on the stock-exchanges, annual meetings for shareholders, evaluation of its current operations by independent parties, and a host of other moves with the ultimate goal of reforming the companies to operate in a way which would benefit both the public and the common shareholders.
Source: Flickr / a.drian.
In an interview with the Wall Street Journal, Berkowitz said his intention behind the letters was to "wake up the boards that they have a fiduciary responsibility to the owners of the company, the owners of the company being the shareholders."
He highlighted the reality through the $202.9 billion in dividends, the companies have fully returned the original $187.5 billion investment the U.S. Treasury made and it is now time for a return to normalcy. And normalcy involves an essential and highly profitable business model, which he suggests if properly utilized, would result in significant gains for all investors -- which of course includes the Treasury through its 79.9% ownership stake.
Despite the letter being dated on Friday, the response to Berkowitz from Fannie Mae came quickly, as Berkowitz received a response Sunday evening from Philip Laskawy, the Chairman of Fannie Mae.
In less than 200 total words, Laskaway all but dismissed the proposal from Berkowitz, noting:
I am confident that the Board is doing the job it has been given. [Federal Housing Finance Agency] has retained certain authorities for its exclusive determination and control, as provided by federal statute, including all decisions relating to the declaration and payment of dividends to the United States Treasury. Our Board and management will continue to perform their duties, as provided by federal statute and delegated by FHFA, diligently and to the best of their abilities.
It is important to remember Fannie Mae is under conservatorship, and it is under the total control of the guidance from the FHFA. It notes plainly in its annual report the directors -- to whom Berkowitz addressed his letter -- "serve on behalf of the conservator and exercise their authority as directed by and with the approval, where required, of the conservator."
In addition, the company says it is "no longer managed with a strategy to maximize shareholder returns," and it cannot retain any of its earnings as a result of its dividend obligations to the U.S. Treasury, and ultimately, "the conservatorship and investment by Treasury have had, and will continue to have, a material adverse effect on our common and preferred shareholders."
The bottom line
As with many conflicts surrounding corporate structure, the fight is not resolved in a letter and response, but it is critical to note Fannie Mae is in no way the typical publicly traded company. While Berkowitz could win hands here and there, one has to wonder if the deck is stacked too much against him, and this is ultimately a losing battle.
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headline news section .this a.m. by the m/f group.
Noranda Aluminum Holding Corp. (NOR) is a producer and seller of primary aluminum products that could be an interesting play for investors. That is because, not only does the stock have decent short-term momentum, but it is seeing solid activity on the earnings estimate revision front as well.
These positive earnings estimate revisions suggest that analysts are becoming more optimistic on NOR’s earnings for the coming quarter and year. In fact, consensus estimates have moved sharply higher for both of these time frames over the past four weeks, suggesting that Noranda could be a solid choice for investors.
Current Quarter Estimates for NOR
In the past 30 days, 2 estimates have gone higher for Noranda with no downward revision in the same time period. The trend has been pretty favorable too, with estimates narrowing from a loss of 20 cents a share 30 days ago, to 16 today, a move of 20.0 %.
Current Year Estimates for NOR
Meanwhile, Noranda’s current year figures are also looking quite promising, with 4 estimates moving higher in the past month, compared to just 1 lower. The consensus estimate trend has also seen a boost for this time frame, narrowing from a loss of 82 cents per share 30 days ago to a loss of 70 cents per share today, an increase of 14.6 %.
The stock has also started to move higher lately, adding 32.2% over the past four weeks, suggesting that investors are starting to take note of this impressive story. So investors may definitely want to consider this Zacks Rank #2 (Buy) stock to profit in the near future.
headlines news section this am
4:06 pm Fannie Mae: January Monthly Summary (FNMA) :
•Decreased at a compound annualized rate of 3.5 percent in January.
•Fannie Mae's Gross Mortgage Portfolio declined at a compound annualized rate of 21.9 percent in January.
•The Conventional Single-Family Serious Delinquency Rate fell five basis points to 2.33 percent in January; the Multifamily Serious Delinquency Rate remained the same at 0.10 percent in January.
•The Effective Duration Gap on Fannie Mae's portfolio averaged zero months in January.
•Fannie Mae completed 12,565 loan modifications in January
The fear of the discovery process going forward by this admin will act as the driver .A few weekends under this ordeal might produce some positive results for shareholders .? A save face move is a certain out come imo? They can't afford to go through with any more stonewalling on it. They will act sooner rather than later .imo
One company that should be on your radar is Noranda Aluminum Holding Corp. (NOR). The stock of this Metal Product Distributor has seen its Zacks Rank surge over the past four weeks, moving from Sell territory to its current position as a Buy.
A key reason for this move has been the positive trend in the earnings estimate revisions picture. For NOR’s full year estimate, we have seen 4 estimates go higher in the past 30 days, compared to no lower revision. This trend has helped the consensus estimate to trend higher, going from a loss of 82 cents a share a month ago to its current level at a loss of 67 cents.
This positive shift in estimates has made some investors take notice and buy the stock. In fact, NOR has seen some pretty solid trading lately, as the company has moved higher by 17.9% in the past month.
If Noranda Aluminum can keep up this great momentum on the earnings estimate front and continue to impress analysts, we could see more gains ahead for this company, suggesting that you might want to put NOR on your watch list for the future.