Hedge fund manager Michael Burry, known for “The Big Short,” is now eyeing government-sponsored mortgage giants Freddie Mac and Fannie Mae, expecting a relisting of their stocks soon. Freddie Mac’s 15-year fixed rate dropped to 5.44% from 5.51%, providing a favorable rate tailwind for the housing market.

Freddie Mac, a government-sponsored enterprise, buys mortgages, packages them into securities, and supports liquidity in the housing market. FMCC stock trades at around $11, up significantly year-to-date and over the past 52 weeks, reflecting a strong recovery trend.

With a market capitalization of about $7 billion and trading at low price-to-sales and price-to-cash-flow ratios, Freddie Mac’s financials show promising signs of growth. Sales totaled $33 billion in September 2025, with net income up and operating cash flow improving.

Freddie Mac’s efforts to reshape its risk profile and loan quality include selling deeply delinquent mortgages and introducing an automation platform for quality control. These initiatives aim to reduce risk exposure and enhance efficiency in the mortgage process.

Despite the lack of formal earnings estimates, FMCC is cautiously rated as a “Hold” by analysts, with an average price target of $18. Burry’s bullish stance on Freddie Mac suggests potential upside, but it remains a speculative investment with policy risks to consider.

Investing in Freddie Mac may be suitable for portfolios seeking high-risk, high-reward opportunities, while conservative investors may prefer a wait-and-see approach. Near-term share price movements will likely hinge on relisting news, while long-term prospects depend on continued improvements in fundamentals and regulatory actions.

Read more at Yahoo Finance: Michael Burry Is Betting Big on Freddie Mac Stock Ahead of a Relisting. Should You?