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Why You Should Hold onto MGIC Investment (MTG) Stock
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Shares of MGIC Investment Corporation (MTG - Free Report) gained 40.11% in the last one year, significantly outperforming the Multi line industry’s growth of 23.42%. The insurer has also witnessed estimates moving north ahead of the earnings release. We expect the company to retain its momentum on the back of a number of positives.
The company remains committed toward growing its insurance in force and expects to have written $46 billion of the same in 2016. Moreover, the multi line insurer has been witnessing a decline in claim payments over the last few quarters. Given the declining pattern of claim filings, we expect the company to have witnessed lower paid claims in 2016.
The multi line insurer’s improving private mortgage market share will boost its insurance in force, which in turn, is expected to drive future revenues. In fact, the company anticipates insurance in force to have rose 5% in 2016.
In addition, a strong capital position will allow the company to repurchase some of its convertible debt. This will lower interest burden on MGIC Investment and facilitate margin expansion.
Notably, MGIC Investment carries a VGM score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. In fact, valuation at the current level is attractive as the stock is trading at a forward P/E ratio of 10.7, a 6.9% discount to the industry average of 11.5.
Our proven model does not conclusively show that the company is poised for an earnings beat this season. Though the company carries a Zacks Rank #3 (Hold), which increases the predictive power of an earnings beat, its Earnings ESP of 0.00% makes surprise prediction difficult. We note that the multi line insurer delivered positive surprises in three of the last four quarters with an average beat of 15.92%.
Stocks to Consider
Some better-ranked stocks from the same space include Radian Group Inc. (RDN - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) , and Kemper Corporation (KMPR - Free Report) .
Radian Group offers mortgage and real estate products and services in the U.S. The company delivered positive surprises in two of the last four quarters with an average beat of 5.87%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hartford Financial offers insurance and financial services to individual and business customers in the U.S. The company delivered positive surprises in two of the last four quarters but with an average miss of 11.69%. It holds a Zacks Rank #2 (Buy).
Kemper Corporation is a diversified insurance holding company that offers property and casualty as well as life and health insurance to individuals and businesses in the U.S. The company delivered positive surprises in one of the last four quarters but with an average miss of 47.62%. It holds a Zacks Rank #2.
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Why You Should Hold onto MGIC Investment (MTG) Stock
Shares of MGIC Investment Corporation (MTG - Free Report) gained 40.11% in the last one year, significantly outperforming the Multi line industry’s growth of 23.42%. The insurer has also witnessed estimates moving north ahead of the earnings release. We expect the company to retain its momentum on the back of a number of positives.
The company remains committed toward growing its insurance in force and expects to have written $46 billion of the same in 2016. Moreover, the multi line insurer has been witnessing a decline in claim payments over the last few quarters. Given the declining pattern of claim filings, we expect the company to have witnessed lower paid claims in 2016.
The multi line insurer’s improving private mortgage market share will boost its insurance in force, which in turn, is expected to drive future revenues. In fact, the company anticipates insurance in force to have rose 5% in 2016.
In addition, a strong capital position will allow the company to repurchase some of its convertible debt. This will lower interest burden on MGIC Investment and facilitate margin expansion.
Notably, MGIC Investment carries a VGM score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. In fact, valuation at the current level is attractive as the stock is trading at a forward P/E ratio of 10.7, a 6.9% discount to the industry average of 11.5.
Our proven model does not conclusively show that the company is poised for an earnings beat this season. Though the company carries a Zacks Rank #3 (Hold), which increases the predictive power of an earnings beat, its Earnings ESP of 0.00% makes surprise prediction difficult. We note that the multi line insurer delivered positive surprises in three of the last four quarters with an average beat of 15.92%.
Stocks to Consider
Some better-ranked stocks from the same space include Radian Group Inc. (RDN - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) , and Kemper Corporation (KMPR - Free Report) .
Radian Group offers mortgage and real estate products and services in the U.S. The company delivered positive surprises in two of the last four quarters with an average beat of 5.87%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hartford Financial offers insurance and financial services to individual and business customers in the U.S. The company delivered positive surprises in two of the last four quarters but with an average miss of 11.69%. It holds a Zacks Rank #2 (Buy).
Kemper Corporation is a diversified insurance holding company that offers property and casualty as well as life and health insurance to individuals and businesses in the U.S. The company delivered positive surprises in one of the last four quarters but with an average miss of 47.62%. It holds a Zacks Rank #2.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>