Mortgage insurers Radian (RDN -0.6%) and MGIC Investment (MTG -1.1%) have each been multi-baggers over the past 15 months ( as well as not as pure of a MI play Genworth GNW), partly due to being previously priced at less than liquidation value, but also due to market share gains as the FHA pulls back from the business.
These sorts of vacuums don't last for long, and a couple of heavy-hitter-backed mortgage insurance companies are nearing IPOs. NMI Holdings - backed by Carlyle Group (CG), Kyle Bass, and BlueMountain - recently filed a S-1 even as it's yet to be profitable and expects to continue to report losses in the near-term. "In financials, it’s a rare occasion that you see such unseasoned deals,” says Josef Schuster, who tracks IPOs. "It’s really hand-to-hand combat,” says the head CUNA Mutual Group's mortgage insurer Sean Dilweg. “It’s pricing, it’s your service, underwriting, how quickly you can respond to a loan.”
Then there's Essent Group (ESNT) - with investors like George Soros and Goldman - currently profitable, and also pitching an IPO.
Whoever makes it first will be the first mortgage insurance company to go public in nearly twenty years.