Why Genworth Financial (GNW) Stock Sank Today

NEW YORK (TheStreet) -- Shares of Genworth Financial Inc. (GNW) closed lower by -2.55% to $16.62 on heavy trading volume on Friday afternoon after the Federal Housing Finance Agency proposed new restrictions which would require higher capital standards on mortgage insurers that do business with Freddie Mac (FMCC) and Fannie Mae (FNMA).

"FHFA's Strategic Plan calls on Fannie Mae and Freddie Mac to strengthen the requirements for private mortgage insurance companies that do business with them in order to reduce Fannie Mae's and Freddie Mac's overall risk exposure and protect taxpayers," the FHFA said on its website.

Other stocks that declined as a result of the proposed regulations include Radian Group Inc. (RDN) down -5.29%, on heavy volume, to $13.77 before the close, and MGIC Investment Corp. (MTG) which was lower by -9.31% to $8.38 on heavy trading volume before the close.

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Separately, TheStreet Ratings team rates GENWORTH FINANCIAL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GENWORTH FINANCIAL INC (GNW) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

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