Fannie Mae (OTCMKTS:FNMA) Stock Price Down 3.9% - Should You Sell?

Key Points

• Fannie Mae shares fell 3.9% to $3.614, with trading volume down sharply from its average; the stock remains below its 50-day and 200-day moving averages.
• Analyst sentiment is cautious: five analysts rate the stock Hold and one rates it Sell, producing a consensus “Reduce” rating, despite an average price target of $8.70.
• Fannie Mae exceeded quarterly earnings and revenue expectations, reporting $0.68 in EPS and $7.57 billion in revenue, but it posted negative return on equity and has very limited institutional ownership.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) shares fell 3.9% on Monday. The company traded as low as $3.57 and last traded at $3.6140. 377,505 shares were traded during mid-day trading, a decline of 93% from the average session volume of 5,226,897 shares. The stock had previously closed at $3.76.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the stock. B. Riley Financial reduced their price objective on shares of Fannie Mae from $8.00 to $7.00 and set a "neutral" rating for the company in a research report on Thursday, July 30th. Keefe, Bruyette & Woods decreased their price objective on Fannie Mae from $6.25 to $3.50 and set an "underperform" rating for the company in a research report on Monday, September 28th. Wedbush reaffirmed a "neutral" rating and issued a $8.00 target price on shares of Fannie Mae in a report on Thursday, July 30th. Finally, Mizuho set a $5.00 price target on Fannie Mae and gave the company a "neutral" rating in a research note on Monday, October 12th. Five research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, Fannie Mae currently has a consensus rating of "Reduce" and an average price target of $8.70.

Fannie Mae Price Performance

The firm's 50-day moving average price is $5.24 and its 200 day moving average price is $6.29. The firm has a market capitalization of $4.07 billion, a price-to-earnings ratio of 87.83 and a beta of 1.68.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The financial services provider reported $0.68 earnings per share for the quarter, topping the consensus estimate of $0.63 by $0.05. The company had revenue of $7.57 billion during the quarter, compared to the consensus estimate of $7.32 billion. Fannie Mae had a negative return on equity of 76.66% and a net margin of 4.59%. On average, analysts predict that Fannie Mae will post 2.63 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Fannie Mae

A hedge fund recently bought a new stake in Fannie Mae stock. Hennessy Advisors Inc. purchased a new stake in Fannie Mae (OTCMKTS:FNMA - Free Report) in the 2nd quarter, according to the company in its most recent 13F filing with the SEC. The fund purchased 30,000 shares of the financial services provider's stock, valued at approximately $195,000. 0.02% of the stock is currently owned by hedge funds and other institutional investors.

Fannie Mae Company Profile

Fannie Mae, formally known as the Federal National Mortgage Association, is a government-sponsored enterprise that supports the U.S. housing finance system. It operates in the secondary mortgage market, purchasing eligible residential mortgage loans from approved lenders and providing liquidity that helps banks and other mortgage originators continue making loans to homebuyers and homeowners.

Fannie Mae primarily supports single-family and multifamily housing. It finances and securitizes qualifying mortgage loans into mortgage-backed securities and generally guarantees the timely payment of principal and interest to investors in those securities.

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