We added to Fannie Mae and Freddie Mac
We’ve made trades in Flagship
On Tuesday, we increased our positions in Fannie Mae (FNMA) and Freddie Mac (FMCC) on behalf of clients in our Flagship strategy.
While both stocks have pulled back roughly 20% from recent highs, our thesis remains unchanged. This dislocation has given us the opportunity to increase exposure to what we believe is one of the most asymmetric risk-reward opportunities in the market today: same thesis, better price.
The additions were funded by trims to T-Mobile (TMUS) and Mastercard (MA), two companies where we remain constructive but see a better near-term opportunity elsewhere.
Same thesis, more clarity, better price
If you’re playing along at home, you’ve likely noticed that we’ve been slowly but surely adding to Fannie Mae (FNMA) and Freddie Mac (FMCC) since February 2025.
When we initiated the positions, our thesis was that both companies would become fully recapitalized and exit conservatorship, a catalyst that has only seemed to increase in its probability since then, in our view.
Recent news surrounding exit plans, continued support from Commerce Secretary Howard Lutnik as early as last week, Bill Pulte’s confidence that they may sell shares to investors in 2025, and comments from Treasury Secretary Scott Bessent yesterday have only increased our confidence in the distribution of outcomes moving forward.
Even after the run-up over the last few months, we believe a successful exit from conservatorship could potentially unlock as much as 4x upside to these companies’ stock prices as earnings are redirected to shareholders and valuations converge with traditional banks.
As that run-up has taken an overdue exhale, we added to the both companies with conviction.
Simply put: it’s the same thesis, with more clarity, at a better price.
Our decision to fund these positions by trimming T-Mobile (TMUS) and Mastercard (MA) is largely a function of opportunity cost. While we still have strong conviction in both companies as long-term Flagship holdings, we believe Fannie and Freddie offer a more compelling risk/reward opportunity for Titan clients over the near/medium term.
As always, let us know if you have any questions about the recent trades; we’re happy to assist.
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