On Jun 21, 2016, we issued an updated research report on MGIC Investment Corp. (MTG - Free Report) .
The multi line insurer’s first-quarter 2016 earnings missed the Zacks Consensus Estimate primarily on higher losses.
MGIC Investment anticipates a decline in its business written in 2016, owing to revision of premium rate cards. Such rate reductions are expected to limit the company’s top-line growth in future. The rate revisions by the company are a direct effect of the associated capital charges of Private Mortgage Insurer Eligibility Requirements (PMIER) and the current marketplace dynamics.
Further, a highly competitive mortgage insurance market remains a headwind. Also, the company faces competition from Federal Housing Administration (FHA), which slashed its annual premiums last year to make loans more affordable.
Notably, MGIC Investment was reinstated to the investment grade status by both Moody’s and S&P in first-quarter 2016. The financial strength of the company was rated Ba3 (with a stable outlook) by Moody’s Investors Service and BB+ (with a stable outlook) by Standard & Poor’s Rating Services. However, as a result of the company’s below Aa3/AA- financial strength rating, it has been operating with each Government Sponsored Enterprise (“GSE”) as an eligible insurer under a remediation plan.
Nevertheless, MGIC Investment has been witnessing improvement in its capital position, which in turn has enabled it to repurchase some of its convertible debt. As a result, the company’s interest burden will be lowered, facilitating margin expansion.
Moreover, an improving housing market as well as declining delinquency will aid the insurer’s earnings over the coming quarters.
Zacks Rank and Stocks to Consider
Currently, MGIC Investment carries a Zacks Rank #4 (Sell). Some better-ranked stocks are Assurant, Inc. (AIZ - Free Report) , James River Group Holdings, Ltd. (JRVR - Free Report) and Horace Mann Educators Corp. (HMN - Free Report) . Each of these stocks holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
On Jun 21, 2016, we issued an updated research report on MGIC Investment Corp. (MTG - Free Report) .
The multi line insurer’s first-quarter 2016 earnings missed the Zacks Consensus Estimate primarily on higher losses.
MGIC Investment anticipates a decline in its business written in 2016, owing to revision of premium rate cards. Such rate reductions are expected to limit the company’s top-line growth in future. The rate revisions by the company are a direct effect of the associated capital charges of Private Mortgage Insurer Eligibility Requirements (PMIER) and the current marketplace dynamics.
Further, a highly competitive mortgage insurance market remains a headwind. Also, the company faces competition from Federal Housing Administration (FHA), which slashed its annual premiums last year to make loans more affordable.
Notably, MGIC Investment was reinstated to the investment grade status by both Moody’s and S&P in first-quarter 2016. The financial strength of the company was rated Ba3 (with a stable outlook) by Moody’s Investors Service and BB+ (with a stable outlook) by Standard & Poor’s Rating Services. However, as a result of the company’s below Aa3/AA- financial strength rating, it has been operating with each Government Sponsored Enterprise (“GSE”) as an eligible insurer under a remediation plan.
Nevertheless, MGIC Investment has been witnessing improvement in its capital position, which in turn has enabled it to repurchase some of its convertible debt. As a result, the company’s interest burden will be lowered, facilitating margin expansion.
Moreover, an improving housing market as well as declining delinquency will aid the insurer’s earnings over the coming quarters.
Zacks Rank and Stocks to Consider
Currently, MGIC Investment carries a Zacks Rank #4 (Sell). Some better-ranked stocks are Assurant, Inc. (AIZ - Free Report) , James River Group Holdings, Ltd. (JRVR - Free Report) and Horace Mann Educators Corp. (HMN - Free Report) . Each of these stocks holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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