QSQuantSignals Research/Scion Template
Try FST free

QS Research · Michael Burry's Scion Capital analyst template · 2006

FEDERAL HOME LOAN MORTGAGE CORP (FMCC)

As of 2026-11-02 · 9/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case 0% · downside -50% · upside +2068%

The market sees a profitable GSE ($12.9B normalized pre-tax, $13.41B TTM total net income) but common shareholders receive only $33M after $13.38B goes to senior preferred; hence the 0.04x P/B and 93.7x P/E. The stock is a binary option on conservatorship exit: downside to $2.38 assumes book halves and P/B holds (-50%), while upside to $103 assumes common captures 5x total net income (+2,068%). That asymmetry is large but the base case at $4.75 is still the unresolved binary price, so we do not have a high-conviction long or short. We are watching for a credible release/dilution catalyst before taking a position.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    The provided sources did not include the actual text of Item 1 Business, so segment, channel, and unit-economics detail is not available. The XBRL data show revenue of $16.66B in FY2020 rising to $23.91B in FY2024 before easing to $23.27B in FY2025. Pre-tax income remained strong each year ($9.23B–$15.20B), while net income stayed near zero or negative, and equity grew from $16.41B to $70.38B over FY2020–FY2025.

  2. ✓ 2. Competitive advantage

    Freddie Mac's Multifamily segment competes with Fannie Mae, FHA, banks, CMBS conduits, savings institutions, debt funds and life insurers on price, service and securitization structures. In 2025 it grew new business 17% to $76.4B, raised average guarantee fees to 56 bps, and shifted toward fully guaranteed securitizations (up 89%), while the portfolio reached $496B. However Multifamily net revenues fell 17% to $3.4B as credit provisions rose. The sources show scale and a government-mandated affordable housing role but do not establish a clear durable moat.

  3. ✓ 3. 10-Q takeaways

    Q3 2026 net income rose 17% YoY to $3.2 billion on 19% higher net revenues, but credit loss provisioning swung to an $800 million build from $175 million in Q3 2025. The mortgage portfolio reached $3.7 trillion; Single-Family YTD new business grew 15% on a refi surge, while Multifamily Q3 new business fell 36% on higher rates. Net worth climbed to $81.0 billion; the excerpt did not disclose buybacks, dividends, or explicit earnings guidance.

  4. ○ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ○ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ○ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

Sign in free to QS Research to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.