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Federal National Mortgage Association (NYSE: FNM)

Federal National Mortgage Association (FNM), also known as “Fannie Mae,” is a government-sponsored enterprise (GSE) chartered by the U.S. Congress to support liquidity and stability in the secondary mortgage market, where mortgage loans are purchased and sold. The Company participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for its mortgage portfolio. It also makes other investments that increase the supply of affordable housing. The Company is organized in three business segments: Single-Family Credit Guaranty, Housing and Community Development (HCD) and Capital Markets. The Single-Family Credit Guaranty segment securitizes single-family mortgage loans into Fannie Mae mortgage-backed securities (MBS) and facilitates the purchase of single-family mortgage loans for the Company’s mortgage portfolio. The Housing and Community Development segment securitizes multifamily mortgage loans into Fannie Mae MBS and facilitates the purchase of multifamily mortgage loans for the Company’s mortgage portfolio. This segment also invests in rental and for-sale housing projects. The Capital Markets segment manages the Company’s investment activity in mortgage loans, mortgage-related securities, debt financing activity, and liquidity and capital positions. The Company’s customers include mortgage banking companies, savings and loan associations, savings banks, commercial banks, credit unions, community banks, insurance companies, and state and local housing finance agencies.

Fannie Mae was founded in 1938 and is based in Washington, the District of Columbia.

Source: Reuters.com, SEC Filings.

Financial Summary

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast amongst two polled investment analysts. Against the Federal National Mortgage Association (Fannie Mae) company.

Source: www.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=FNM

Investment Highlights

FNM Prices New Issue 2-Year Benchmark Notes due July 30, 2012

Banc of America Securities, Goldman Sachs & Co., and UBS Securities LLC are the joint-lead managers.  The co-managers include, Citigroup Global Markets Inc., FTN Financial Capital Markets, Loop Capital Markets, J.P. Morgan & Co., Nomura Securities International Inc. and Samuel A. Ramirez & Co. Inc.

FNM exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. FNM has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers.

FNM will redeem the principal amounts indicated for the following securities issues on the redemption dates indicated below at a redemption price equal to 100% of the principal amount redeemed, plus accrued interest thereon to the date of redemption:

Source: http://www.fanniemae.com/

Technical Analysis

Source: http://stockcharts.com

FNM is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

FNM is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

FNM’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below zero, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Source: Thomson Financial

http://www.thomson.com/financial/financial.jsp

Insider Trading Activity

http://www.thomson.com/financial/financial.jsp

Source: Yahoo Finance

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