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Zacks Analyst Blog Highlights: CIT Group, Bank of America, Citigroup, American International Group and MGIC Investment Corporation
Chicago, IL – July 17, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: CIT Group (CIT), Bank of America (BAC - Analyst Report), Citigroup (C - Analyst Report), American International Group (AIG - Snapshot Report) and MGIC Investment Corporation (MTG - Analyst Report).
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Here are highlights from Thursday’s Analyst Blog:
Will CIT Be Allowed to Fail?
It appears that the CIT Group (CIT) is on the verge of filing for bankruptcy as it has been unable to reach a deal with the government for emergency funding. The fate of the ailing business lender will provide a crucial clue into the Obama Administration’s future stance on the bailouts for financial firms.
While CIT is much smaller than other firms that received frequent bailouts -- such as Bank of America (BAC - Analyst Report), Citigroup (C - Analyst Report) and American International Group (AIG - Snapshot Report) -- it is not exactly small. However, there appears to be a view in the administration now that it is the type of company that should be allowed to fail since the economy is now strong enough to absorb a failure of company that is not "too big to fail."
If CIT collapses, it will be the first time since the collapse of Lehman Brothers that the administration has declined to bail out a struggling financial company of significant size. The company is a source of funding for thousands of small and mid-size businesses. It is also a big player providing cash advances to clothing manufacturers and suppliers, and credit to retailers.
The impact of its failure could be particularly severe in California because of the state's large apparel-import business. If the company were to file for Chapter 11 protection, it would probably be the fourth-largest bankruptcy by assets.
MGIC Badly Misses Estimates
Before the opening bell today, MGIC Investment Corporation (MTG - Analyst Report) announced its second quarter results. Core earnings shrank to -$2.74 per share from -$0.81 in the prior year period, abysmally missing our expectations of ($0.65) per share.
Total revenue increased 7.1% year over year to $454.5 million. Net premiums written decreased 11.14% year over year to $330.4 million. New Insurance written declined considerably by 58% year over year to $5.9 billion. Persistency (% of premium remaining in force from the prior year) improved to 85.1%, compared with 79.7% in the prior-year period. The percent of delinquent loans doubled to 12.04% as compared with 6.02% in the prior-year period.
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About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
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