MGIC - An Opportunity Through Mortgage Credit Exposure
REIT Analyst • 12 Comments
REIT Analyst • 12 Comments
MGIC Remains A Compelling Value
MGIC Investment Corp.: Investors Should Wait For More Clarity
Ashleigh Rogers • 23 Comments
Ashleigh Rogers • 23 Comments
Thu, May 19, 11:29 AM
- Talk of consolidation in the private mortgage insurance industry is nothing new, says BTIG's Mark Palmer, but the potential for action may be higher after the announcement of the pending retirement of Radian's (RDN -1.7%) CEO S.A. Ibrahim.
- Since the company has no successor in place, it makes sense to think the board might be a little more likely to entertain offers than otherwise, says Palmer.
- Who might be the best fit? Essent Group (ESNT -1.9%), he says. First, Essent trades at 1.58x book value vs. Radian at 0.96x, thus giving Essent highly valued currency to use, even as Radian's market cap of $2.56B compares to Essent's at $1.83B.
- There is overlap between the two's client bases, so the combined company would have market share just in the mid-20% area vs. Radian's current 19.5% and Essent's 12.6%. Still, with one less competitor, pricing issues in the industry might fade a bit.
- Palmer reminds Radian and MGIC investment (MTG -1%) had agreed to merge just before the housing market blew up.
Mon, May 9, 7:42 AM
Wed, Apr. 20, 10:16 AM
- Others were disappointed with MGIC's (MTG +1.2%) headline earnings miss, but MKM's Harry Fong was not. He says a less favorable than hoped loss reserve development, and a small loss on debt extinguishment were responsible for the miss.
- "To us, this was not a disappointing report, and we maintain our Buy rating and $10 price target."
- Fong ranks #153 out of 3,895 analysts on TipRanks.
- Now read: MGIC Investment's (NYSE:MTG) CEO Patrick Sinks on Q1 2016 Results - Earnings Call Transcript (April 19)
Tue, Apr. 19, 11:29 AM
- During the earnings call, management says its decision to revise its rate structure and cede some weaker credit business to the FHA means "modestly" lower insurance volumes this year compared to last. This makes the boost to profitability from the run-off in the company's legacy books that much more important, writes a still-bullish Mark Palmer from BTIG.
- The decline in NIW in Q1 to $8.3B from $9B a year ago was a bit larger than expected, and losses of $85M up from $81.8M were responsible for this morning's earning miss.
- The stock's still cheap at 1.08x book value, and slapping an 11x multiple on his 2018 earnings estimate of $1.11 gives Palmer a $12 price target - 60% above the current level.
- MTG -3.9%
- Now listen: MGIC Investment (NYSE:MTG) Q1 2016 Results - Earnings Call Webcast (April 19)
Tue, Apr. 19, 7:27 AM
- Q1 new insurance written of $8.3M down 7.7% from a year ago. Insurance in force of $175M up 5.4%.
- Primary delinquent inventory of 55,590 loans down 23% Y/Y.
- Q1's results included a tax provision of $34.5M vs. just $3.4M a year ago thanks to last year's use of the DTA. Company also took a pretax loss of $13.4M after buying back about $270M of convertible debt.
- Conference call at 10 ET
- Previously: MGIC Investment misses by $0.05, misses on revenue (April 19)
- Now read: Fresh Data Dispels Housing Market Concerns (March 31)
- MTG flat premarket
Tue, Apr. 19, 6:47 AM
Mon, Apr. 18, 5:30 PM
Tue, Apr. 12, 11:01 AM
- MGIC Investment (NYSE:MTG) has bounced about 27% following a brutal run which bottomed out in late January. Mark Palmer is still a bull on the stock, and his $12 price target represents 68% upside from the current level.
- The impact of the PMI "rate war" and new capital charges are mostly baked into the current stock price, says Palmer. A sizable possible upside catalyst for MGIC and peers, he says, is the potential for the FHFA and the GSEs to take action to share more risk with the PMIs going forward.
- The FHFA has thus far paid little more than lip service to the idea, but any signal it's taking it more seriously would refocus investors on the upside case for MGIC, which as recently as July traded for 1.7x book value.
Fri, Apr. 8, 7:48 AM
Tue, Mar. 1, 12:16 PM| Tue, Mar. 1, 12:16 PM | 2 Comments
Wed, Feb. 10, 3:02 PM
- It's notoriously difficult to read anything into the weekly mortgage applications report from the MBA, as a weather event or timing of a holiday can throw things off.
- Instead checking the year-over-year figures over a period of several weeks, Seeking Alpha contributor Markos Kaminis finds purchase applications averaging 20% growth so far in 2016, including a 25% Y/Y gain for the latest reported period.
- A check of the price charts of a number of housing-related stocks - homebuilders, title companies, mortgage insurers - paints a far more depressing picture of real estate, and suggests investors may have a buying opportunity at hand.
- Notable tickers: XHB, ITB, PHM, TOL, MTG, RDN, ITIC, FAF, FNF
Fri, Jan. 22, 8:57 AM
- MGIC Investment (NYSE:MTG) tumbled yesterday following an inline Q4, but after announcing rate changes which should lead to slowing business.
- BTIG's Mark Palmer, however, calls management's move a prudent one which should support profit margins. He notes the stock is down more than 42% over the past six months and selling for less than book value. "We could argue that the impact of the pricing competition within the PMI industry is already baked into the stock price."
- He reiterates his Buy rating and $12 price target.
- In addition to the pricing change, says Goldman's Eric Beardsley, management guided for slower credit improvement, and a lower-than-expected outlook for premiums. He pulls the stock from his company's Conviction Buy list, but it does remain a Buy with $10 price target.
- MGIC closed yesterday at $6.36.
Thu, Jan. 21, 8:04 AM
- Q4 adjusted net income of $113.9M or $0.26 per share vs. $75.1M and $0.19 one year ago.
- CEO Patrick Sinks says the company will be hiking rates, and thus writing somewhat less business this year (though the portfolio should still grow). He expects, however, that the new rates will result in life-time after tax returns in the mid-teens.
- Q4 new insurance written of $9.8B up 3.1% from a year ago. Insurance in force of $174.5B up 5.8%. Primary delinquent loans of 62.633 down 21.6%. Annual persistency of 79.7% down from 82.8%. Consolidated risk-to-capital ratio of 13.6:1 from 16.4:1. GAAP loss ratio of 42% vs. 54.8%. GAAP underwriting expense ratio of 13.9% flat.
- Earnings call at 10 ET
- Previously: MGIC Investment EPS in-line, misses on revenue (Jan. 21)
- MTG flat premarket
Thu, Jan. 21, 6:50 AM
Wed, Jan. 20, 5:30 PM
Wed, Jan. 13, 8:02 AM
- WIth the stock having lost a third of its value since July, analyst Mark Palmer - who rates MTG a Buy with $12 price target (more than 50% above current level), says the Q4 earnings report offers management a golden opportunity to address - and hopefully dismiss - the concerns that led to the nosedive.
- As for valuation, the stock trades at 1.21x book value - less than half the level at which it sold for prior to the financial crisis.
- Results are due on Jan. 21, with consensus EPS at $0.29, but Palmers estimate at just $0.25.
- Among the discussion items: Has management reset its 2016 expectations given the NAR's less-than-optimistic housing forecast? What is the current status of MTG's discussions with the FHFA regarding increased risk sharing? Has MTG been able to hold or boost market share in the face of competitive pressures in Q4?
MGIC Investment Corp. provides private mortgage insurance in the United States. Its products include mortgage insurance and pool mortgage insurance. The company's mortgage insurance product may be written on a flow basis, in which loans are insured in individual, loan-by-loan transactions or may... More
Industry: Surety & Title Insurance
Country: United States
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