WASHINGTON - The top brass at the Federal National Mortgage Association made a high-profile, daylong effort this week to promote the company's stock to an elite audience of money managers and securities analysts.

The stock struggled last year as Fannie Mae's bread-and-butter fixed- rate business shrank and the adjustable-rate market proved hard to crack.

Recently, the stock has rebounded, hitting a new high of $100.125. The shares have been carried upward by the bond market's rally and improved prospects for fixed-rate lending.

Still, many observers believe the shares - like those of the rival Federal Home Loan Mortgage Corp. - continue to be undervalued, at least partly because investors fear the political risk of intervention by Congress or regulators.

In pitching their stock on Wednesday at the company's biennial investor conference, top executives stuck to just a few themes and returned to them again and again.

Their message was that Fannie Mae thinks big and understands the financial and political risks of its business inside out and is highly effective in controlling them.

First, chairman James A. Johnson stressed that Fannie Mae's franchise was "rock solid."

Key policymakers know that Fannie Mae is critical to the success of the nation's housing finance system, Mr. Johnson said.

Later, other executives spoke of how Fannie Mae's drive to lend to low- income and moderate-income families, minorities, and immigrants strengthens the franchise by extending the company's benefits to new groups.

At lunch, Rep. Jim Leach, R-Iowa, chairman of the House Banking Committee, demonstrated Mr. Johnson's point.

Though occasionally a critic of Fannie in the past, Mr. Leach confined himself to praising the company for its role in making the mortgage market more liquid and reducing financing costs.

He suggested that as the federal government is streamlined, public policy would dictate that private companies pick up more of the slack, but appeared to assure investors that Fannie Mae's record on this front was strong.

Robert J. Levin, executive vice president of marketing, tackled the issue of business volume. He explained that loan volumes are rising as depository institutions generate fewer adjustable-rate mortgages.

The cost of funds at depositories is going up, the difference between short and long rates is narrowing, and ARMs generated last year are adjusting upward, Mr. Levin said. All these factors combine to make ARMs less attractive to consumers, and benefit Fannie Mae's fixed-rate loan business.

But it was Fannie Mae's president, Lawrence M. Small, who made the most spirited pitch.

He promised that, "at a minimum, Fannie Mae will add on another billion dollars of annual operating earnings by the end of 1998."

"The company has never been stronger," Mr. Small said. "The long-term environment for housing is very strong. The political environment and regulatory environment are stable. (Fannie Mae) essentially derives its particular business strength from its usual positioning at the center of the housing and housing finance systems of this country."

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