Mortgage Insurers making a Bottom
On a mixed day in the market stocks
like MGIC (MTG), Radian Group (RDN), MBIA (MBI), Ambac Financial (ABK) and PMI
Group (PMI) rallied. These stocks were beaten down during the housing and
financial crisis the past 8 months but could possibly be heading for a rebound.
MGIC Investment Corp jumped 19%
after it announced a loss of $34.4 million for the quarter which was better
than what the street expected. Not only was the last quarter not as bad as
expected but business is good for the insurer. The company wrote $19.1 billion
in new policies. I would look for analyst to upgrade their earnings estimates
in the next few days to coincide with this new positive outlook.
The other companies in the industry
also jumped. Radian was up 9% today, Ambac rose 9%, PMI Group rebounded 3.8%,
while MBIA was up 9%. Analyst had expected as low as a 1.22 loss on the year
for MBIA just seven days ago, but now views the company as profitable with 0.42
in earnings. MBI is the strongest of the group and could move higher first.
Keep a watch on this industry for a buying opportunity.