(Adds details from presentation, stock price moves)
NEW YORK May 5 Activist investor William Ackman
said on Monday he recommends the shares of mortgage finance
giants Fannie Mae and Freddie Mac because
the companies have low liquidity risk.
Ackman, speaking at the Sohn Investment Conference in New
York, said the shares of the companies, both of which are now
trading around $4 a share, could be worth $23. A better case
would be for them to trade around $47 a share, he said.
Shares of Fannie Mae rose 3 percent and shares of Freddie
Mac jumped 6.3 percent.
Ackman is one of the industry's most closely watched
investors. The flagship fund of his Pershing Square Capital
Management is up 19 percent this year, handily beating most
rival hedge funds.
Pershing Square has owned common shares of both Fannie and
Freddie since late last year.
Regulators took control of the two companies in 2008 after
losses stemming from subprime mortgage investments pushed them
to the brink of insolvency.
Both companies, the two largest suppliers of mortgage funds,
are operating under conservatorship while Congress considers an
overhaul of the mortgage-finance system. The Senate is
considering taking action to wind down the two taxpayer-owned
companies, but the measure faces an uncertain future.
At the end of the presentation, Ackman told investors that
it is time "to get off our Fannie."
(Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler)