A billionaire Bill Ackman thinks this stock could jump 500%abruptly. Why Wall Street expects to be born?
Bill Ackman built a net value of $ 9.3 billion by spotting promising opportunities. AND Hedge Fund The manager usually does not reveal the opportunities he likes to the public. However, he recently made an exception.
In a long post on social networks on December 30, 2024. Ackman said, “While we are looking forward to [to] 2025, one investment in our portfolio stands out for the great asymmetrical upside down opposite the lower part, so I thought I would share it. “The billionaire investor thinks that this stock could jump abruptly about 500% by the beginning of 2026. So why does Wall Street expect it to fall?
Ackman noted in his post on X (previously known as Twitter) that his hedge fund had owned Federal National Mortgage Association (OTC: Fnma) (Generally known as Fannie Mae) for over 10 years. However, he admitted that the effect of the shares was “not great”.
Although Fannie Mae was not the winner during most of Ackman had supplies, she has been a much different story in recent months. Since the US election on November 6, 2024, the price of shares of a company sponsoring the Government (GSE) is four times.
The reason for the rise of Fannie Mae is the same as why Ackman loves the odds of shares so much. There are significant speculations that Trump’s administration will privatize both Fannie Mae and another GSE, Federal Loan for Corp Home. (OTC: FMCC) (Generally known as Freddie Mac).
Ackman envisioned a scenario in which Fannie Mae’s federal conservation would end. He designed that the initial public offer (IPO) would be possible until the fourth quarter of 2026, with a value of about $ 34 per share. This is approximately 6x (or 500%) higher than the current Fannie Mae share price.
Given the huge launch of Fannie Mae from November, many investors seem to be almost equally bulls because of Fannie Mae as Ackman. However, analysts on Wall Street are not in that group.
Data and infrastructure provider in financial markets Lseg He surveyed two analysts in January covering Fannie Mae. One stock rated weaker results, while the other recommended sales. Targets appreciate the analyst for Fannie Mae reflects the expectation that the shares will drop about 56%.
Why are these analysts so pessimistic to Fannie Mae? Keefe, Bruyette & Woods (KBW), unit Stifel FinancialIt provides a significant risk that the predicted privatization of GSE will not happen, according to reports.
Provided that an investment bank based in New York is not as negative about Fannie Mae as others. KBW set a target price of $ 4 for shares, which is about 29% below the current share price.
