Two financial giants, Fannie Mae and H.F. Ahmanson & Co., have each embarked on recapitalization programs in recent months, but with divergent reactions from investors. While the shares of Fannie Mae have climbed briskly, Ahmanson's stock has been flat at best in a rising market.

Fannie Mae announced early last month that it was issuing $1 billion of preferred stock and would use most of the proceeds to repurchase common shares. It also split the shares four-for-one and donated $350 million to its own foundation.

Ahmanson, parent of Home Savings of America, the nation's largest thrift, announced last October that it would repurchase some $250 million of its shares. And last month, it told American Banker it would shrink the size of its mortgage portfolio this year and use the proceeds to further repurchase shares.

Both strategies are aimed at strengthening profitability. Frank Raines, vice chairman of Fannie Mae, said the switch to preferred shares should leverage the profits available for the common, and the charitable contribution would end the need to fund the program every year.

At Ahmanson, the idea is to shed mortgages that are not providing an adequate return while continuing to function as a mortgage banking operation, selling most of the loans it originates in the secondary market. It is also planning a substantial expansion in consumer finance.

Why, then, the different reactions to apparently similar strategies?

Tom O'Donnell, an analyst with Smith Barney & Co., New York, said he thinks both strategies are positive. "Fannie Mae has come of age in terms of capital-structure management," he said. But investors appear to have misunderstood Ahmanson's moves, and he said he thinks the softness in the stock price provides a buying opportunity.

"The company is far from brain dead as many other thrifts appear to be," said Mr. O'Donnell. "The idea of the largest thrift becoming something other than it has been has spooked investors."

But he said he believes Ahmanson's moves are nonetheless well conceived. "It wants to increase its presence in consumer lending. But it's not going to buy an expensive consumer finance company, and it will be a gradual, long-term shift."

"The power of the secondary market will continue to expand, so why go after low yield?" he said.

Ironically, this rising power is driving the two companies in opposite directions. Charles Rinehart, chairman of Ahmanson, says the advantages of government sponsorship have helped Fannie Mae and Freddie Mac squeeze the profits out of portfolio investment for thrifts such as his.

For his part, James A. Johnson, chairman of Fannie Mae, says of Mr. Rinehart's view: "What he's saying is, he has a product people don't want." Adjustable-rate mortgages that are the thrifts' bread-and-butter product have been out of favor with borrowers in the current period of low interest rates.

Steve Schwartz, who heads the investor relations program at Ahmanson, says the stock had already risen some 65% last year when the company first announced a repurchase program in October.

He added that the rationale for the company's shift in strategy, while well understood by some key investors, appeared to be taking time to sink in. "There may be bumps along the road," he said. "It will be a matter of time. There will be questions that need to be answered." He added that Ahmanson continues to conduct an extensive investor communications program with shareholders, analysts, and other investor constituencies.

Late this month, it will have a daylong meeting with securities analysts and money managers in Pasadena, Calif., providing a golden opportunity to set the record straight.

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