An earlier version of this story incorrectly stated that Assured Guaranty aimed to restart its municipal bond insurance business. Assured Guaranty has an active business insuring municipal bonds. TheStreet regrets the error.

NEW YORK ( TheStreet) -- Assured Guaranty ( AGO - Get Report)'s largest shareholder, Wilbur Ross, called the bond insurer "probably the best risk/reward position in my entire portfolio," in a brief email exchange Friday.

Ross added that he was heartened by a U.S. District Court ruling Wednesday, in which a judge ruled Assured Guaranty can move forward with claims against UBS. Assured argues UBS made misrepresentations about the quality of loans it packaged into securities that Assured Guarantee agreed to insure. Judge Harold Baer threw out some of of the claims, however.

The "adverse ruling against UBS is another vindication for Assured's assertion that a major reason for Residential Mortgage Backed Securities defaults was inappropriate underwriting by mortgage originators and packagers who did not live up to the reps and warranties they made to Assured," Ross wrote.

"UBS is pleased with the Court's ruling that Assured Guaranty lacks the contractual right to enforce loan repurchase demands, and as Assured knows, the court ruled on threshold legal issues only and its claims have yet to be tested in court," a UBS spokeswoman said in an emailed statement. "Assured is a highly sophisticated market participant who knowingly undertook insurance risks that it now seeks to transfer improperly to UBS following the collapse of the US housing market."

Expounding upon his bullish thesis, Ross wrote that Assured "is the only credit enhancer to have remained profitable every quarter through the financial crises and every quarter it reduces its exposure to legacy commitments."

Adding that the investment "is probably the best risk/reward position in my entire portfolio," he asked "what else with uninterrupted earnings trades at half of high quality book value and not much more than 1/4 of book value, adjusted for the present value of prepaid premiums for the enhancement of investment grade municipal bonds? It has survived the subprime crisis, the Greek default and will survive the next crises as well," he contended.

Ross's investment firm WL Ross & Co., a unit of Invesco Ltd. ( IVZ - Get Report) owns 19.8 million shares in Assured, according to his latest 13F filing with the Securities and Exchange Commission. According to Bloomberg data, which shows only 19.4 million shares, his average cost was $18.07, compared to $14.11 in late afternoon trading Friday. Ross also sits on Assured's Board of Directors.

Ross bought the majority of his shares in April 2008 for an average price of $23.47. He kept buying as the stock fell, however, never paying more than $12 per share after the initial misstep.

Assured, which like other bond insurers ran into trouble when it expanded out of municipal bond insurance into insuring bonds backed by pools of mortgages underwritten during the housing boom, hopes to grow its municipal bond underwriting business. One obstacle is the threat of a downgrade Moody's Investors Service ( MCO. BTIG analyst Mark Palmer argues the shares are worth "north of $16 and perhaps much higher," even if it never writes another insurance contract, however.

Not all big investors are fans of insuring muni bonds. Berkshire Hathaway chairman Warren Buffett called it a "dangerous business" after he exited the sector in 2009.

"I do not agree about the "dangerous business" comment This company has been profitable every quarter, all through the crisis," Ross wrote in response to Buffett's comments.

Asked whether he is interested in Assured as a runoff play or as a growing muni bond insurer, Ross wrote, "either way the stock is very cheap in my opinion."

-- Written by Dan Freed in New York.

Follow this writer on Twitter.

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