The Federal Home Loan Mortgage Corp. is as formidable a stock as it is a name. Freddie Mac has reported increases in net income in eight of the last nine years. And its capital base has likewise missed only one step in its upward march since 1984.

The dip in net income came in 1990, an unremarkable 5%. In the fourth quarter of that year, the shares fell as low as $10 a share.

It's been nothing but upward since then. The price rocketed to a high of about $46 in 1991 and $49.25 last year. It has gone as high as $56.75 this year and has recently, been trading at $53.

Plenty, of investors have taken a ride on this bandwagon. Almost 500 institutions together hold about 79% of the shares.

But now a petering out of the refinancing boom is widely expected. Is this the last hurrah for Freddie Mac stock?

|Earnings Will Grow Steadily'

Nobody seems to think so. The institutions have been net buyers recently, and the stock remains on many analysts' buy lists.

Says chairman Leland Brendsel: "Our earnings are driven by the large amount of mortgages that we have purchased and retained in our portfolio. As the portfolio continues to grow steadily earnings will grow steadily."

He expects the portfolio of retained mortgages to grow by 15% this year, and to climb by at least another 13% next year even if the refi market dries up.

|Positive Story Remains Intact'

Bruce Harting of Salomon Brothers is one analyst who agrees. After a conference call earlier this year with Freddie's management, he reiterated his buy recommendation, "reflecting the exceptionally strong growth prospects for the retained portfolio."

Prudential Securities analyst Thomas O'Donnell, while noting that portfolio runoff has exceeded 40% in recent months, reiterated his buy rating anyway. The "positive story remains intact," he said.

Freddie Mac makes money in two major ways: profits from buying mortgages, then selling and guaranteeing them; and through interest on mortgages it holds for its own portfolio. It can also make or lose smaller amounts on mortgages held while being securitized.

The refinancing boom has built the profits from selling mortgages. At the same time, it has allowed Freddie Mac to build its portfolio as thrifts have ceded market share to the mortgage banks that typically pump product into the secondary market.

Chairman Brendsel points out that the ebb of refinancings will reduce Freddie Mac's fee income, but will increase earnings on its loan portfolio as prepayments subside.

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