Radian Group, Up 50% in 2013, Gets Another Upgrade

NEW YORK (TheStreet) -- Radian Group (RDN), shares of which have risen more than 50% in 2013, is finally getting respect from sell-side analysts.

The mortgage insurer saw an upgrade from Keefe Bruyette & Woods analyst Bose George, less than two weeks after Susquehanna Financial Group analyst Jack Micenko raised his recommendation on the stock. Just nine analysts cover Radian, according to the company Web site.

Shares of Radian, which rose more than 4% on Friday, were rising slightly in premarket trading Monday.

In lifting his recommendation to "outperform," KBW's George cited a $690 million capital raise last week, including sales of both common and convertible stock.

"The offerings should help support Radian's capital and liquidity position while enabling it to continue writing profitable new business," George wrote. He adds that Radian's return to profitability should allow it to capture an additional $990 million worth of deferred tax assets (DTAs). That event, in addition to the capital raise, should lift book value to $11.50 a share, according to George's calculations. Radian shares closed at $9.17 Friday.

That rise in book value may help win over still more analysts. Creditsights analyst Rob Haines cited the fact that Radian was trading almost at book value as a reason for staying away from the stock. (He upgraded the bonds to market perform last month.)

FBR Capital Markets analyst Steve Stelmach, who still has a "market perform" on Radian shares, raised his price target earlier this month while acknowledging the company is "finding its footing."

-- Written by Dan Freed in New York.

Follow @dan_freed

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