MGIC Investment Corporation
) declined by 2.7% to close at $8.96 on Mar 11, after the company
reported lower primary new insurance for Feb 2014 on Mar 10.
Primary new insurance written for the month of February was $1.5
billion, down 21.0% year over year and 11.8% sequentially.
ARCH CAP GP LTD (ACGL): Free Stock Analysis
MGIC INVSTMT CP (MTG): Free Stock Analysis
OLD REP INTL (ORI): Free Stock Analysis
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Though MGIC Investment did not register any increase in new
business, improvement was witnessed in delinquency levels.
Delinquent inventory for Feb 2014 was 97,588, down 27% year over
year and down 4.6% sequentially.
Primary new insurance written at MGIC Investment was $29.8
billion in 2013, up from $24.1 billion in 2012 and $14.2 billion
in 2011. The increase was due to larger origination volume as
well as an increase in the private mortgage insurance industry's
According to Inside Mortgage Finance, till 2010, MGIC Investment
had been the largest private mortgage insurer (as measured by new
insurance written) for a span of more than ten years. In 2013,
MGIC Investment had the third largest market share (as measured
by new insurance written), with market share decreasing to an
estimated 17.0%, from 18.4% in 2012 and 20.3% in 2011, in each
case excluding HARP refinances.
Management at MGIC Investment is encouraged by the recovering
demand for home purchases. It anticipates that since the majority
of purchases that need a mortgage do not have a 20% down payment,
the company is poised to benefit from this market opportunity.
After suffering from losses for the past six years due to the
subprime crisis, the industry is now recovering gradually. The
current market structure thus presents a good opportunity for
stronger players, who enjoy a sturdy capital position and can
tolerate regulation. Moreover, due to the exit of some firms
during the housing market crisis, supply is limited. Mortgage
insurers with a differentiated financial profile can therefore
benefit from current market conditions.
Some of the companies under the Zacks coverage are well poised to
gain from the changing trends in the mortgage industry and
Old Republic International Corporation
) with a Zacks Rank #1 (Strong Buy) is one of them.
Another new entrant - Arch Capital Group Ltd. (
), also with a favorable Zacks Rank #2 (Buy), entered the the
U.S. mortgage insurance market by completing the acquisition of
CMG Mortgage Insurance Company (CMG MI) from CUNA Mutual Group
and PMI Mortgage Insurance Co. (
) in Jan 2014.
MGIC Investment currently carries a Zacks Rank #3 (Hold).