David Hochstim, an analyst at Bear, Stearns & Co., has raised his investment ratings on Fannie Mae and Freddie Mac a notch, from "attractive" to "buy."

He based his opinion on price declines in both enterprises' shares. "The stocks have been down by 9% to 13% over the last month," he said. "I think it presents a buying opportunity on two very good long-term growth stories."

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