Radian Group (RDN): Today's Post-Market Laggard

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 Radian Group ( RDN) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Radian Group as such a stock due to the following factors:

  • RDN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.8 million.
  • RDN is down 2.4% today from today's close.

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More details on RDN:

Radian Group Inc., through its subsidiaries, operates as a credit enhancement company in the United States. The company operates in two segments, Mortgage Insurance and Financial Guaranty. The stock currently has a dividend yield of 0.1%. RDN has a PE ratio of 6.3. Currently there are 4 analysts that rate Radian Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Radian Group has been 2.6 million shares per day over the past 30 days. Radian Group has a market cap of $3.1 billion and is part of the financial sector and insurance industry. The stock has a beta of 3.29 and a short float of 23.7% with 11.44 days to cover. Shares are up 15.9% year-to-date as of the close of trading on Wednesday.

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 Radian Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, increase in stock price during the past year and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 32.2%. Since the same quarter one year prior, revenues rose by 26.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, RADIAN GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for RADIAN GROUP INC is rather high; currently it is at 57.17%. It has increased significantly from the same period last year. Along with this, the net profit margin of 49.66% significantly outperformed against the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • RADIAN GROUP INC 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 year. We feel that this trend should continue. During the past fiscal year, RADIAN GROUP INC continued to lose money by earning -$1.37 versus -$3.41 in the prior year. This year, the market expects an improvement in earnings ($2.43 versus -$1.37).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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