This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bond Insurer Radian Group Is 'Finding Its Footing'

NEW YORK ( TheStreet) -- Radian Group (RDN - Get Report) received two price-target increases from equity analysts and an upgrade from a debt analyst.

FBR Capital Markets analyst Steve Stelmach focused on improved 2013 guidance in raising his price target to $8 from $6, as the bond insurer's management said its risk-to-capital ratio should remain below 25:1. Radian also cited operating profitability and a growing business.

Despite increased competition, Stelmach says the mortgage insurance industry is poised to grow. The growth comes partly from price hikes by the Federal Housing Administration aimed at slowly reducing the government's role in mortgage insurance. Also, Stelmach argues private insurers are increasingly focused on writing new business rather than mitigating losses left over from the housing bubble.

"Radian seems to be on the cusp of finding its footing," Stelmach writes, though he reiterated his "market perform" rating, arguing the stock has come too far too fast. Indeed, Radian shares have more than doubled in the past six months.

Radian did get an upgrade on Monday from Creditsights, which raised its recommendation to "market perform" from "underperform." That applied only to the company's bonds, however, as Creditsights analysts Rob Haines and Eric Axon argued Radian will be able to pay its debt through at least 2017.

The note also indicated the analysts prefer Radian's bonds to those of MGIC Investment Corp. (MTG - Get Report), another mortgage insurer. In an email, however, Haines wrote that while Creditsights does not have a price target on the equity, "it looks expensive to us. There has been a major run up in price over past year ... this is still a company that has not made money in years. Trading at almost book value seems pretty overdone to us."

Radian also saw its price target lifted to $6 from $5 by Susquehanna Financial Group, which maintained a "neutral" rating. Susquehanna's report couldn't be obtained.

Radian shares were up 0.9% to $6.57 on Tuesday.

-- Written by Dan Freed in New York

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MTG $11.03 -0.36%
RDN $18.42 -0.22%
AAPL $118.44 -2.36%
FB $94.14 0.14%
GOOG $631.21 0.90%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs