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TheStreet Open House

Insurance Stocks Suffer Rising 'Short' Interest

NEW YORK ( TheStreet) -- Insurance stocks more than tripled from the market low in March through the end of last year, four times the pace of the S&P 500 Index. This year, they're struggling. Here are the five insurance stocks with the biggest gains in short interest in the past seven days, suggesting investors increasingly are becoming more bearish on the companies.

5. MBIA (MBI - Get Report): New York-based bond insurer.

Seven day change in short interest ratio: 2.76

Financial Fundamentals: The company's third-quarter negative return on average equity of 14.1% was better than the negative 16.9% of rival insurer Assured Guaranty (AGO). Policy reserves of 2.3 times equity compares with Assured's 3.2. Negative 40% net income as a percentage of revenue beats the peer average of negative 93%.

Market Indicators: Price-to-book value of 40% compares with insurers' average of 92%. The stock has risen 33% this year, a rapid increase that may have led to increased short interest. Still, the stock is 18% less than analysts' consensus price target.

News: Earnings will be released March 1. MBIA has a $500 million tax-recovery benefit, unaffected by ownership changes in 2009.

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