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Radian Group Inc. Message Board

  • afriendin_sandy afriendin_sandy Nov 7, 2007 2:14 PM Flag

    6 Billion Cash, less than 1 billion debt???

    This stock has a much higher book value than what it is currently priced at. I DON'T UNDERSTAND WHY THIS IS SO LOW, AND WHY WOULDN'T IT JUMP UP??????

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    • afriendin,

      Your previous post had "Strong Sell" as the recommendation. That's why I made the short-covering comments.
      $90K is quite a position to have on a stock as risky as this one. You must have a very large portfolio?

      "You will see, and currently see that the restaurant and retail sector will not be all that good over the next 6 months. "

      Agreed. I wouldn't touch retail.


      So far, I'm very unimpressed with Bernanke. He's been inconsistent. Frequently contradicts himself. If only we had someone like Volcker at the helm, we'd be in much better shape.

      Stephen Roach has been writing for quite some time that the Fed needs to take these asset bubbles into consideration, instead of just targeting core CPI. He's right. But none of these gutless wonks at the Fed have the BALLS to do what's right rather than what's popular. Cowards. Greenspan was a terribly vain man, and thus he did a lot of damage. Brilliant men with all that education and they still can't get even the most simple thing right. I favour abolishing the Fed altogether. They have not come close to fulfilling their mandate. I trust the markets far more than a secretive, powerful clique of men.

      Most people don't realize what's happening, but the Fed is intentionally letting the air out of the stock market. They won't let it get too out of hand (i.e. crash), but they need to avoid inflationary pressure from the stock market itself in order to continue to be able to lower rates to try and save housing. No easy trick!

      More cuts are certainly on the way, but the Fed must make sure the stock market doesn't party based on that. It's no coincidence we've been selling off since the day after the Fed sent the message that they might not be lowering. scary! lol. Total BS. Expect another 1% within the next 6 months. In addition, expect government bailouts of lenders and borrowers. Once again the public will pay for the recklessness of Wall St.

      The government will take care of everything and everyone. Right? :(

    • This stock I feel is severly oversold and you are correct in it being undervalued. Its obviosuly a result of credit fears. I think in the 3-6 monthes if you get in at a good entry you will be rewarded with an above average return. Ive been working in mortgages for 10 years Radian never insured sub prim loans only conforming so they are going to be much less affected than many peaple feel. Also, Now that FHA being more involved with mortgages PMI companies will have more cusomers that have higher credit worthyines. Radian and the likes are going to have a good run when fears subside. Radians current price is a reult of panic. The fundementals will eventaully evavate Radian price to a more fair price

      I Started a position at 9.95 I could see it going to 18 in the near term

    • Well I agree the price is overshot, however , the price of the company should be worth less than the 42$ book value.

      While a normal company can just shut its doors sell its assets and voila 42$ value, Radian cannot do the same. They are liable for all future payments whatever they may be. And since people don't know what those liabilities will be the stock is pretty much everywhere. Now for the 10$ value to be true, the market is expecting writedowns till at least the 4th quarter of 2009..that is really pessimistic.

      So if the credit worries are a thing of the past by April, well then we should see a 27-32$ price range, more if they hit the profit side.

      If losses are maintained at the same level for the next few quarters then the stock should stay at these levels.

      For the stock to go lower, not only do the losses have to last a couple of years but they must increase quarter to quarter.

      Thats the scenario, I'm in in the 9's, and i'm long.

      • 2 Replies to alexmach1
      • alex,

        I'm not familiar with US corporate structures. Maybe you or someone else here can shed some light on something I've been wondering about.

        If MI becomes insolvent, can Radian essentially cut MI loose while keeping FG and the other units intact? In other words, in the case of bankruptcy for MI does the structure prevent those who are owed from making claims against assets in the other entities? Or is the entire structure fair game for creditors?

        Does anyone know how that works? Thanks.

      • RDN will go lower if Moodys reduces RDN's Insurance Financial Strength rating below AA3. At that point, cash flow, that would have gone to RDN, will pass to those who do not get down graded below AA3.

        For those who have been paying attention -- RDN is already paying yesterday's claims from today's premiums --- cash flowing to RDN better not be impeded.

    • Worry not about your lack of understanding --- ignorance is bliss at the bottom we hear.

    • << I DON'T UNDERSTAND >>

      Truer words were never spoken.

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