FMCC heads into tomorrow's Q2 earnings release with short sellers quietly rebuilding positions and the ORTEX short score creeping higher — even as the borrow market remains easy and the stock trades near a one-month low.
The most notable shift in positioning is the steady climb in short shares over the past three weeks. Short interest has risen from roughly 8.1 million shares in late June to 10.6 million now — a 30% build over the period — before easing modestly in the last two sessions, down about 2.4% on the week. That build is the real story here, not the daily noise. Despite the increase in shares short, the borrow market remains wide open: availability is running near 365% of short interest, meaning there are more than three shares available to borrow for every one currently lent out. Cost to borrow has actually eased sharply this week, dropping from around 0.93% to 0.70% — the lowest level in the dataset — confirming that demand for new shorts is not straining supply. The ORTEX short score has drifted up from 45.9 at mid-month to 48.5 now, consistent with the gradual positioning build, but still well within neutral territory.
The Street presents a sharply divided picture ahead of the print. The consensus leans bullish — three buys against one hold — but the bull and bear cases rest on completely different premises. Mizuho initiated with an Outperform and a $9 target in May, while KBW has maintained an Underperform through multiple target revisions, most recently cutting to $8.50 in April. Deutsche Bank's September 2025 Buy initiation carried a $25 target, but at $5.64 today, that figure looks disconnected from where the stock actually trades; the mean target of $13.38 is more than double the current price, which reflects conservatorship optionality rather than a conventional valuation gap. The price-to-book multiple of 7.1x has compressed by nearly 5.5 points over the past 30 days, a meaningful re-rating lower. The PE ratio is essentially decorative at over 1,300x — a consequence of the conservatorship balance sheet structure rather than anything operationally useful. EPS momentum factor scores rank in the 2nd percentile on a 30-day basis, and in the 1st percentile over 90 days, which signals deteriorating near-term estimate revisions even as longer-horizon growth reads are more constructive.
The ownership picture is dominated by two large, patient holders. Pershing Square holds roughly 63.6 million shares, though that position was last reported in January 2025 with no change logged. Capital Research and Management holds 61.7 million shares as of March 2026, also flat. These are the known GSE-thesis longs — investors positioned for a privatisation outcome rather than near-term earnings beats. They provide a structural floor but not a near-term catalyst. Insider data is stale — the most recent recorded trade dates to 2018 — so offers nothing useful for the current setup.
The last earnings release, on April 30, produced a meaningful positive reaction: the stock rose 8.5% on the day and held most of that gain through the following week, closing the five-day window up 8.7%. With the stock down about 8.6% over the past month heading into tomorrow, that prior reaction sets a clear reference point for how the market has rewarded a clean print. Close peer FNMA has drifted about 1.9% lower on the week, tracking similarly to FMCC's modest 0.5% gain, suggesting no divergence in sentiment between the two GSE names ahead of the release.
Tomorrow's report will test whether the near-term EPS momentum deterioration the factor scores are flagging shows up in the actual numbers — or whether the annual earnings trajectory holds firm enough to echo the April result.
See the live data behind this article on ORTEX.
Open FMCC on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
