Category Archives: $MTG

What do $RDN(radian), $MTG(MGIC Corp) and $MBI (MBIA) have in common…?

They all reached a peak of around $60 in 2007 at the height of the credit boom!Their business is mortgage and credit insurance, and is a very profitable business in boom times!

7 years on and the stocks are recovering gradually as the delinquent inventory drops and future EPS expectations rise.
Not sure if these stocks will get back to $60 again, but there is the potential for them to double over the next 2-3 years.

As EPS forecasts for MBI are not reliable, and it is more in the credit insurance business than mortgage insurance, added GNW (genworth) as a comparable, which is more diversified than $RDN and $MTG.

Radian (RDN) FV= $20, Px=15.25 2007 Peak = $60
MGIC Corp (MTG) FV= $12, Px=9.1 2007 Peak = $60
Genworth ($GNW) FV= $22, Px=$18 2007 Peak = $36

If you think the Mortgage Insurance will recover buy one of the above, take profit at Fair Value and ride profits in the hope they will recover over the long term for potential 100% gain over 3 years.
2CentView pick of the above 3 is $MTG, but is perhaps the most riskiest!

2CentView has a core position in $RDN, bought in 2013 at $9.