So why is there such a large short position in RDN?? Someone please explain this to me. I know there will be a lot of short covering following the analyst upgrade, but after the Fed news and upgrade someone please provide some logical facts why anyone would short a $15 stock with a $20 target? I guess they just hate breaking up the band. Sorry dudes, but your short party is long over. You are staring a major hangover right in the face. You must have nothing better to do than blow money. I'm curious to see what happens once they settle per the 10Q or monetize their Financial Guaranty segment.
Sentiment: Strong Buy
I agree...today's unemployment benefits numbers are evidence of that. The economy is still fragile.
As you said, the key is to hold this stock long-term. There is no way RDN is going out of business. RDN now equipped with Clayton intelligence will start to eat significant market share from other MIs and continue to flourish. Next year my prediction is that we will likely see $23, that's almost 60% upside.
But for the next 6 months, market is not looking good overall as a ~15% correction is long overdue and so I would wait till FHFA announces it’s final decision and then get out of the market and get back in when the time is right….sometime in the Feb-Mar, 2015 timeframe or simply ride the market correction and continue to hold long-term.
My 2 cents.
Well put K.. After a quadruple plus it was the year for a breather. Still staying long along with Ex and Bernie from low single digits. Patience is the key here. Fed has to support housing mkt or back in recession again. Janet does not want to raise rates as Gundlach says. But 1-2% on the fed funds rate won't change much except to flatten the yield curve. Europe will take over for Fed since their rates are so low.
I know several of you must be wondering why RDN is flat for the year, the best and the simplest answer is that it had a great previous year with triple digit gains and it's resting now. RDN has weathered the biggest housing storm in decades and to find that it not only standing but more robust than ever is pretty amazing. Long-term it will not only survive but thrive.
There are several other aspects to consider here
1. The investors are in a holding pattern to determine the final outcome of new GSE Requirements for Private Mortgage Insurer Eligibility and how RDN will be impacted. Essent, NMI and other newer MI companies have a clear edge here since they have no bad baggage from previous years and so it’s really unfair to GNW, RDN, MTG and other companies which have stood by borrowers and banks. IMHO FHFA will tone down a bit and partially agree to what MTG and RDN have proposed.
2. The indices are at peak and there has been no real market correction since the last 6 years. Looking at the bull market and some craziness here and there, I would definitely get out of the market and stay on the sidelines and this is not because of RDN but because low tide lowers all boats. But the downside is that as soon as FHFA announces eligibility rules in favor of RDN, the stock will easily shoot up 10-15%. So I will wait till then and take my chances.
3. World peace deteriorating – ISIS, Syria, Ukraine, etc…Not good for the stocks and fear will cause unreasonable volatility in the market. RDN is withstanding this pretty good so far.
4. Fed pressured to wind down pumping money into the economy and raise interest rates as inflation starts to become a concern. This is a genuine concern for RDN shareholders as it will mean less new business and hence less revenue. But credit score revamp will partially offset this to some extent and home prices will come down which will increase sales again even with relatively higher interest rates.
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RDN has been flat for a year, but for good reason. Stock more than doubled. Gains need to be digested before the next move up. Another strong quarter like the last one might do the trick.
I have sold most of my position and only hold a small amount of shares in Radian. In my opinion there are just to many obstacles in the MI sector. Nothing is moving regardless of how good the earnings or news. The GSE requirement announcement was a rough patch that as much as the pumpers pump, has put a stop sign to its growth. The market has been on a tear for a few years and the MI Stocks, though some gain, have been a dissapointment.
However, the biggest issue is the control shorts have on Radian and MTG. The short float is extremely high and that "short squeeze" has never happened as much as the pumpers say the shorts are in big trouble. Where is the squeeze? Plain and simple has not happened. For the pumpers, its always the next earning period or monthly statistic report and as always it does nothing for the PPS.
That said, there are much better stocks out there to make money. I do not see Radian even at $15 by the end of the year. The market correction will pressure the entire sector. Of course, this is only my opinion but I think I've been around long enough to know the psychology of this sector.
On final note, I am long on my minimal shares and in no way shorting.
Jett I have respect for you. Been reading your posts for several years now. Are you still in RDN and MTG? I agree with you that they will certainly tank again sometime this fall but i cannot time the market. I've proven that time and time again. It seems to me that both these companies still have a lot of upside would you agree?
My prediction is based on past performance. I've been with this stock for 5 years. the biggest jump was 2012-2013 and only when Cramer pumped it to the moon. Radian continues to be way off its highs of 2007 and really has been a disappointing stock, unless you started investing in it when it was between $1-3. That was the best performance in a year. Since then it has been stuck. The entire MI sector is in a funk.
The market is (not if) going to correct and Radian will go down with it. Fortunately not like in the past but at least 10-20%. No brainer here really. However, it is not worth shorting since there are so many other opportunities out there.
Geepers Creepers and DJ Hammy Ham will disagree but look at their posts over the past year compared to my posts. I've been right, they have been either in denial or in a cloud. The most solid person on this board is EX who made a bundle here but he does not even post much anymore. Why, because he is living his dream with his new sports bar, paid for by Radian and MTG. He took a huge risk and won big. We may not always agree but I have much respect for him.
So no fancy figures or strategy, just 5 years of living Radian.
I read the statement. Final PMIER's regs may be published by the end of this year with 2-year compliance deadline expected near the start of 2017.
This is my opinion: Given the extended period of a soft patch in housing in 2014, the FHFA, right now, may be seriously considering modifications to the proposed PMIER's enhanced reserve requirements. Yesterday, the mortgage bankers association joined the mortgage insurers claim that higher reserve requirements will lead to higher mortgage insurance rates to be absorbed by 1st time homebuyers.
Sentiment: Strong Buy
Here is the link to the story and reason for today's upside and shortcovering:
Geepers Creepers and DJ Hammy Ham Sandwich are the biggest pumpdy pumps of RDN. I don't even post anymore because this stock is dead, stuck and boring. It has seen its glory days. The reality, $15.00 by year end is a stretch. I predict, $13.00 year end since the market will correct at some point beating this down like "whack-a-mole.