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Is MGIC Investment (MTG) Down 3.9% Since the Last Earnings Report?
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It has been about a month since the last earnings report for MGIC Investment Corporation (MTG - Free Report) . Shares have lost abbout 3.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MGIC Investment Gains as Q1 Earnings Beat Estimates
MGIC Investment reported first-quarter 2017 operating net income per share of $0.31, which outpaced the Zacks Consensus Estimate of $0.24 by 29%. The bottom line also surged 63% year over year.
Including income tax provision related to IRS litigation, net income increased 41% year over year to $0.24 per share.
Operational Update
MGIC Investment recorded total operating revenue of $261 million, up nearly 2% year over year. The upside was driven by higher premiums earned and investment income.
New insurance written was $9.3 billion in the reported quarter, up 12% from $8.3 billion in the year-ago quarter.
As of Mar 31, 2017, the company’s primary insurance in force was $183.5 billion, up 4.8% year over year.
Persistency, or the percentage of insurance remaining in force from the year before, was 76.9% as of Mar 31, 2017. The company had recorded persistency of 79.9% as of Mar 31, 2016.
Percentage of delinquent loans, including bulk loans, was 3.62% as of Mar 31, 2017 compared with 5.62% as of Mar 31, 2016.
Primary delinquent inventory plunged 18.4% year over year to $45.3 billion.
Net underwriting and other expenses totaled $43 million, up 3.1% year over year.
Losses incurred in the quarter narrowed to $27.6 million from $85 million. The $49 million reduction in losses was due to the positive development on the company’s primary loss reserve. This apart, the company witnessed a lesser new delinquent notices received and a lower claim rate.
Total loss and expense decreased 44% year over year to $86.9 million on due to lesser loss incurred.
Financial Update
Book value per share, a measure of net worth, jumped nearly 13.7% year over year to $7.75 as of Mar 31, 2017, 12.5% higher than $6.89 as of Mar 31, 2016.
As of Mar 31, 2017, MGIC Investment had $5 billion in cash and investments, up 4.2% year over year.
Risk-to-capital ratio was 9.9:1 as of Mar 31, 2017 compared with 12:1 as of Dec 31, 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one upward revision for the current quarter compared to one downward.
At this time, MGIC Investment's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is equally suitable for value investors and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Is MGIC Investment (MTG) Down 3.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for MGIC Investment Corporation (MTG - Free Report) . Shares have lost abbout 3.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MGIC Investment Gains as Q1 Earnings Beat Estimates
MGIC Investment reported first-quarter 2017 operating net income per share of $0.31, which outpaced the Zacks Consensus Estimate of $0.24 by 29%. The bottom line also surged 63% year over year.
Including income tax provision related to IRS litigation, net income increased 41% year over year to $0.24 per share.
Operational Update
MGIC Investment recorded total operating revenue of $261 million, up nearly 2% year over year. The upside was driven by higher premiums earned and investment income.
New insurance written was $9.3 billion in the reported quarter, up 12% from $8.3 billion in the year-ago quarter.
As of Mar 31, 2017, the company’s primary insurance in force was $183.5 billion, up 4.8% year over year.
Persistency, or the percentage of insurance remaining in force from the year before, was 76.9% as of Mar 31, 2017. The company had recorded persistency of 79.9% as of Mar 31, 2016.
Percentage of delinquent loans, including bulk loans, was 3.62% as of Mar 31, 2017 compared with 5.62% as of Mar 31, 2016.
Primary delinquent inventory plunged 18.4% year over year to $45.3 billion.
Net underwriting and other expenses totaled $43 million, up 3.1% year over year.
Losses incurred in the quarter narrowed to $27.6 million from $85 million. The $49 million reduction in losses was due to the positive development on the company’s primary loss reserve. This apart, the company witnessed a lesser new delinquent notices received and a lower claim rate.
Total loss and expense decreased 44% year over year to $86.9 million on due to lesser loss incurred.
Financial Update
Book value per share, a measure of net worth, jumped nearly 13.7% year over year to $7.75 as of Mar 31, 2017, 12.5% higher than $6.89 as of Mar 31, 2016.
As of Mar 31, 2017, MGIC Investment had $5 billion in cash and investments, up 4.2% year over year.
Risk-to-capital ratio was 9.9:1 as of Mar 31, 2017 compared with 12:1 as of Dec 31, 2016.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one upward revision for the current quarter compared to one downward.
MGIC Investment Corporation Price and Consensus
MGIC Investment Corporation Price and Consensus | MGIC Investment Corporation Quote
VGM Scores
At this time, MGIC Investment's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'B'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is equally suitable for value investors and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.