Mortgage company Freddie Mac (OTC: FMCC) saw its stock rise more than 7% today as it announced a net income of $1.2 billion for the second quarter of 2012. This was the company’s first profitable quarter since the first quarter of 2011. The company is not requesting any federal aid from the government this quarter. This will be the fifth quarter that the company has not requested federal aid since it was bailed out in 2008.
Fellow mortgage company Fannie Mae (OTC: FNMA) also announced a strong second quarter, with a reported net income of more than $5 billion. Home values are showing some signs of improvement, which is boosting the companies’ bottom lines.
Freddie Mac also released an Economic and Housing Market Outlook today, which shows that the housing market is making gains in several categories, including home prices and vacancy rate of rentals. Shadow inventory, or excess vacant housing, still exists, but is not as bad as previously thought.
Freddie Mac also announced today that it plans to issue a new five-year Reference Notes security, due on September 29, 2017. The issue will be priced on August 9, 2012, and will settle on August 10, 2012, at benchmark size. Dealers headed by BNP Paribas Securities, Goldman Sachs and Barclays Capital will offer the new five-year Reference Notes security. An application will be made to list the issue on the Euro MTF market of the Luxembourg Stock Exchange.
After closing at $0.286 last night, Freddie Mac’s stock opened at $0.3036 this morning. It rose as high as $0.33 before closing at $0.308. It gained $0.022, or 7.7%, from yesterday. The stock has gained 30% this week so far. The 52-week high was recorded on $0.3940 on February 16, 2012. The stock saw a low of $0.1936 on December 21, 2011.
Volume also saw some gains, with the number of shares traded eight times above normal. Close to 8.3 million shares were traded today, just shy of yesterday’s volume of 8.38 million shares. February 6, 2012, saw a 52-week high of 10.7 million shares traded. The average daily volume was exceeded all throughout February 2012.
Penny stock newsletters have not heavily promoted Freddie Mac since 2010. However, it has been making some headway this week. Will Freddie Mac continue to make gains in the stock market? Although the housing market is starting to pick up, unemployment is still high, which is causing homeowners to default on their mortgages. Freddie Mac will possibly continue to see some gains if and when more jobs are created. The company needs the unemployment situation to improve soon.
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