This Day On The Street
Continue to site
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

Radian Skeptics Ignore Genworth, MGIC

NEW YORK ( TheStreet) -- Radian Group (RDN - Get Report)saw its shares lose more than 10% on Monday following a story in Barron's that raised questions about the bond insurer's recent rally.

Somewhat more surprising, however, was that shares of Genworth Financial and MGIC Investment Corp also fell -- by 1.32% and 4.08%, respectively -- despite the fact that the story compared those two bond insurers favorably with Radian. Two separate analyst reports released ahead of Monday's open also made the case for Genworth.

In its story, Barron's noted that in the first three quarters of 2012, MGIC "rejected less than 7% of its incoming claims (by number) despite having capital problems of its own. On the same basis, Radian rejected more than 40%." The article also made a strong case that Genworth "is more conservative in its reserving, despite having a materially better mortgage-insurance portfolio."

BTIG analyst Mark Palmer cited the Barron's report liberally in his own research ahead of Monday's open to make the case for Genworth, which he rates a "buy."

"We continue to believe [Genworth's] U.S. mortgage insurance unit is relatively better positioned to survive, to take advantage of the market rebound in the coming years, and to contribute to its parent's turnaround," Palmer wrote.

Genworth also got an upgrade to "outperform" from "neutral," from Macquarie analyst Sean Dargan ahead of Monday's open.

Dargan made no mention of the Barron's report, but argued the US mortgage Insurance industry "will return to profitability in 2013 for the first time since 2007."

He contends the rebound "will be driven by lower levels of new delinquencies more than improving home values in the short-term, but the improved credit profile of home buyers will older vintages burn off and a larger percentage of the book is comprised of more recent, higher- returning loans."

While private mortgage insurers have taken a severe hit from the 2008 subprime crisis, policymakers appear to determined to see them play a role in mortgage finance going forward, as both Democrats and Republicans say they want to reduce the role of government in the sector. As a result, regulators have been especially lenient on mortgage insurers, alowing them to continue to write new insurance even though they do not meet minimum capital standards.
1 of 2

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GNW $4.97 0.00%
MTG $9.49 0.00%
RDN $14.33 0.00%
AAPL $117.81 0.00%
FB $105.45 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs