Verdict: Mixed

Key finding: No new fact today — Michael Burry's weekend Substack restated the known bear case (Treasury's ~$388B senior preferred converting to common could dilute common holders ≥90%) and said he sold the common for junior preferreds. FNMA fell -14.4% to 3.46, a new 52-wk low, breaking the Mar-19 low 3.60. First dive on FNMA (no prior rows).

Scorecard

Ticker Rev last Q ($M) Rev YoY last Q Rev YoY prior Q Gross margin Op margin Net income last Q vs yr ago P/S Mkt cap 1-mo price %
FNMA 40,808 +2.5% -0.2% n/m (GSE) n/m $3.98B vs $3.32B n/m ~$4.0B -31.6%
FMCC 34,148 +4.1% +3.3% n/m (GSE) n/m $3.84B vs $2.39B n/m ~$2.0B -29.9%
MTG 295 -2.9% -3.0% 95.8% (up) 80.9% EPS 0.86 vs 0.81 4.7x $5.6B -11.1%
ESNT 363 +11.2% +1.7% 86.5% (flat) 63.5% EPS 2.08 vs 1.93 4.3x $5.7B -8.9%

Sources: FNMA/FMCC = FMP quarterly income statement (Q2-26 vs Q2-25; revenue = interest income, so margins/P-S not meaningful); MTG/ESNT = fundamentals_quarterly + stocks. 1-mo = 9/9 -> 10/9 close (FMP EOD / prices_daily). Mkt cap FNMA/FMCC = FMP quote 10/12 intraday. FMP EPS for FNMA/FMCC is ~0 (earnings accrue to Treasury's senior preferred), so net income is shown instead.

FNMA (with FMCC) is the group laggard vs the mortgage insurers: earnings are growing (net income +20% YoY) yet the stock is -31.6% in a month vs MTG/ESNT about -10% — the market is pricing the ownership question, not the business.

Move

Catalyst

Sector

Risks

Judgement

MIXED. Burry adds no new fact — SPS dilution has been the known bear case all year — so a -14% day has an overreaction element. But the structural point is real, the trend is a clean year-long downtrend with no higher low, the policy clock points past the midterms, and today is a breakdown into a new 52-wk low. Momentum is fully negative; no positive catalyst in sight. Burry's point is that the junior preferreds are the better-ranked instrument for exposure to the policy outcome (not analyzed here).

Sources