On Mar 26, 2014, Zacks Investment Research upgraded U.S.
private mortgage insurer
MGIC Investment Corp.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
MGIC has been experiencing improving industry fundamentals of
late after suffering losses for several years owing to the
subprime crisis. The company broke even in the fourth quarter of
2013, beating the Zacks Consensus Estimate of a loss of 2 cents.
The result compared favorably with an operating loss of $1.91 per
share reported in the year-ago quarter.
The improving demand for home purchases will add to the company's
top line going forward. The company increased new primary
insurance written to $29.8 billion in 2013 from $24.1 billion in
2012 and $14.2 billion in 2011.
MGIC Investment is also witnessing lower paid claims as well as
an improvement in delinquency rates, which will aid the bottom
MGIC Investment has been the largest private mortgage insurer (as
measured by new insurance written) for more than 10 years. In
2013, MGIC Investment had the third largest market share, which
is expected to increase given the efforts made by the company to
revamp its business.
The company's efforts towards improving its capital position
through the $1.15 billion capital raised in Mar 2013,as well as
through the strategic use of external reinsurance are also
commendable. A strong capital position will enable it to comply
with regulations along with pursuing new business
Other Stocks to Consider
Some better-ranked players worth considering in the sector
FBL Financial Group Inc.
ING U.S. Inc.
). All these stocks hold a Zacks Rank #2 (Buy).
FBL FINL GRP-A (FFG): Free Stock Analysis
KEMPER CORP (KMPR): Free Stock Analysis
MGIC INVSTMT CP (MTG): Free Stock Analysis
ING US INC (VOYA): Free Stock Analysis Report
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