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The short sellers of insurance stocks are back.
Taking the most heat is
(CIA - Get Report)
, with a short interest ratio of 17.6, up 3.8 in a week. Citizens, however, has outperformed its peers, and analysts' consensus price target for 2009 is $9. Someone has got it wrong.
The largest increase in short interest, up 5.7 to 12.9, was in
Ambac Financial Group
, recently declared solvent by Wisconsin's insurance regulator after it abandoned its attempts to create a separate corporate bond insurance company. It's struggling to reach an agreement over its guarantee for swaps between
and the Massachusetts Turnpike Authority following Moody's downgrade.
, a volatile stock with a beta of 1.7, has a short interest ratio of 15.4, an increase of 4. The shares have fallen 30% during the past year. Maybe some believe the credit swap insurance market is exposed. Certainly, Primus was displeased and asked that its ratings be withdrawn last month when Standard & Poor's downgraded the company.
(MCY - Get Report)
received a negative outlook from Moody's last month after it received approval for a 3% rate cut in its California market. It holds third place behind
Zurich Financial Services' Farmers Group
, which completed the purchase of
American International Group's
(AIG - Get Report)
car insurance subsidiary, 21st Century, on July 1. That competitive situation appears to have some nervous, as rate reductions keep receiving approvals. With a short interest ratio of 12.6, up 3.7 in the week, even this company with a low-volatility beta of 0.83 faces an examination.