Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified MGIC Investment Corporation ( MTG) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified MGIC Investment Corporation as such a stock due to the following factors:
- MTG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $72.2 million.
- MTG has traded 167,801 shares today.
- MTG is up 4.1% today.
- MTG was down 8.7% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in MTG with the Ticky from Trade-Ideas. See the FREE profile for MTG NOW at Trade-Ideas More details on MTG: MGIC Investment Corporation, through its subsidiaries, provides mortgage insurance to lenders and government sponsored entities in the United States. Currently there are 3 analysts that rate MGIC Investment Corporation a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for MGIC Investment Corporation has been 5.8 million shares per day over the past 30 days. MGIC Investment has a market cap of $3.1 billion and is part of the financial sector and insurance industry. The stock has a beta of 3.93 and a short float of 10.9% with 4.40 days to cover. Shares are up 8.9% year-to-date as of the close of trading on Thursday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates MGIC Investment Corporation as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins. Highlights from the ratings report include:
- The gross profit margin for MGIC INVESTMENT CORP/WI is currently extremely low, coming in at 6.94%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, MTG's net profit margin of -0.55% significantly underperformed when compared to the industry average.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 99.6% when compared to the same quarter one year prior, rising from -$386.69 million to -$1.41 million.
- The revenue fell significantly faster than the industry average of 102.5%. Since the same quarter one year prior, revenues fell by 32.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- This stock has increased by 183.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in MTG do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- MGIC INVESTMENT CORP/WI reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MGIC INVESTMENT CORP/WI continued to lose money by earning -$0.23 versus -$4.59 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$0.23).
- You can view the full MGIC Investment Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.