The firm maintained its "market outperform" rating on MGIC Investment, a private mortgage insurance company.
The mortgage insurance industry is expected to have strong second quarter results, JMP Securities said in an analyst note.
Volumes for new insurance written are experiencing solid growth, with an estimated 20% increase.
Refinance volume is also expected to be up, with a 10% increase, while purchase volume is estimated to be up 27%, analysts said.
Additionally, recent changes to the Private Mortgage Eligibility Requirements (PMIERs), which now include a capital charge for mortgage insurances that are paid by the lender, are expected to benefit the mortgage insurance industry, analysts added.
MGIC Investment will report its 2015 second quarter financial results on Thursday before the market opens.
Separately, TheStreet Ratings team rates MGIC INVESTMENT CORP/WI as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MGIC INVESTMENT CORP/WI (MTG) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 14.9%. 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, MGIC INVESTMENT CORP/WI's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 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 turned its bottom line around by earning $0.64 versus -$0.23 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.64).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 121.8% when compared to the same quarter one year prior, rising from $59.98 million to $133.08 million.
- You can view the full analysis from the report here: MTG Ratings Report