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.