Here's How Much Investing $100 In Fannie Mae Stock Back In 2010 Would Be Worth Today

Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500 SPY total return for the decade was 250.5%. But there’s no question some big-name stocks didn’t keep pace along the way.

Fannie Mae’s Difficult Decade

One market laggard of the past decade was mortgage aggregator Federal National Mortgage Association FNMA.

Fannie Mae was one of the hardest-hit stocks during the financial crisis in 2008 and 2009. Fannie received nearly $120 billion in U.S. government bailouts during the crisis. In addition, the Federal Housing Finance Agency placed Fannie in conservatorship in September 2008.

The initial terms of the conservatorship included Fannie Mae paying the treasury a 10% annual dividend on its preferred shares. After losing more than 90% of its value in the 2000s, Fannie Mae shares started the 2010s at a price of around $1.16. The first major news of the decade for investors came in June 2010 when the company announced its stock would be delisted from the NYSE and trade on the Over-the-Counter Bulletin Board.

Shortly after the delisting, Fannie shares dropped as low as 18.5 cents per share, their low point of the decade.

Two years later in 2012, the Treasury amended the terms of Fannies conservatorship, ordering the company to turn over all profits to the government indefinitely. The amendment essentially wiped out all value for common shareholders. However, Fannie investors have subsequently filed a series of lawsuits questioning the legality of the amendment.

In April of 2013, Fannie Mae reported a $17 billion profit for 2012, its first since the crisis. A month later, Fannie Mae reported a $58 billion profit for the first quarter of 2013. Those massive profits triggered optimism in the market, sending Fannie stock soaring as high as $6.35 in early 2014. Unfortunately, that level would mark the high point for the decade.

After dropping back below $1 in early 2016, Fanie shares caught fire again following President Donald Trump’s 2016 election. Trump had pledged to make housing finance reform a top priority in his administration, and Fannie shares climbed as high as $5 following the election.

2020 And Beyond

Housing finance reform has been a slower process than investors had hoped, and Fannie shares have since drifted back below $1.70 to start off the 2020s. But while the 2010s were certainly a disappointment for Fannie Mae investors, they were certainly much better than the previous decade.

In fact, Fannie Mae investors that held on through a volatile decade turned a modest profit, and $100 worth of Fannie Mae stock bought in 2010 would be worth about $159 today.

Looking ahead, analysts are still optimistic about 2020. The average price target among the four analysts covering the stock is $4, suggesting 135% upside from current levels.

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