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Radian Group Inc. Message Board

  • tommiegun53 tommiegun53 Mar 21, 2012 6:06 PM Flag

    Good Metrics Could Put Radian in a "SuperCycle"

    If Radian continues to be impacted by positive Metrics, it Could move into a "Supercycle"mode where measures of market valuations must be measured on a 3 year historical basis.

    3 year data should be looked at in terms of the "Relative Strenght Index", "Slow and Fast Stochastics", and the "Money Flow Index".

    By looking back three years you include the rapid rise of stock prices during March-September 2009 and December 2009-April 2010. Those periods were false starts of recovery but, provide a gimpse of what a real recovery might look like in terms of stock price.

    The reason those periods should be viewed is because stocks where dramatically impacted by the steep drop that occured in stock prices during 2007-2008.

    Over the last 3 years there were times when we thought that the mortgage insurers were showing recovery only to revert back to heavy losses. At no time since 2008 have we been as close to a real recovery, as we are now.

    The key to a real recovery for the mortage insurers is a halt to foreclosures or a reversion to the long run historical level of foreclosures that doesn't deplete all insurance premiums collected.

    The reason banks were undervalued in terms of stock price is foreclosures have plagued their earnings capabilites and now they are popping because investors feel that foreclosures of a heavy magnitude are coming to an end.

    Bank of America made money in all their various business segments except consumer real estate in Q4 2011. If they can stop the losses in home lending, they will be strong profitable enterprise.

    Radian is be strong in the mortgage insurance business because their New insurance Written(NIW) is rising and defaults are dropping.

    The reason the stock price is going up is the default inventory is falling and they will be profitable soon. In the meantime, as defaults decline cash flow will increase as funds that are tied up in "Reserve For Loan Losses and Loss Adjusted Epenses" are released.

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    • We're still in a supercycle.

    • ■Dollar Volume—Dollar volume of primary new insurance written on newly originated conventional mortgage loans totaled $6,733.4 million in March.
      ■Certificates Issued—MICA members reported that 30,080 borrowers used private mortgage insurance to buy or refinance a home in March.
      ■Applications—The number of private mortgage insurance applications received in March by MICA members totaled 32,540.
      ■Defaults and Cures—MICA members reported 21,624 defaults and 28,026 cures in March.
      Statistics in this report include data from the following companies: Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, and Radian Guaranty Inc.

      MICA is the trade association representing the private mortgage insurance industry. Its members help loan originators and investors make funds available to home buyers for low down payment mortgages by protecting these institutions from a major portion of the financial risk of default.

      MICA members have helped hundreds of thousands of low- to moderate-income families save money by buying or refinancing a home with less than the traditional 20 percent down payment. Private mortgage insurance premiums are tax-deductible for many borrowers who purchase or refinance a home through 2011.

      Download Attachment (XLS) »

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    • Radian stock will follow Radian financial results.

      With bullish macroeconomic results from RE market and US economy, we are in good shape.

    • It's all good from here.

    • blah blah blah. I'll believe it when I see it.

    • He Ex....Great to see you back. Timmy has been on a roll and I saw your post why he relates to Rodeo Clowns. Ya know, if the stock price followed how wonderful everything is based on the posts on this board (mostly Timmy), we may possibly have a higher PPS than Apple.

    • WOW...a voice of reason...looking at the totality of the markets...how refreshing.

      Now get ready to duck...tommie's gonna get ya! HA!

      thanx...peace out...exmo

    • agreed. we had the experience of how the MM pulled RDN down to $1.91 on Dec.21/11 before RDN climbing. I think the MTG's QTR report would be the turning poit.

    • Only 1,200,000 million share available to short at IAB. In addition, short volume on Friday was around 30% so needless to say there are tutes just shorting this due to weakness in the overall markets.

    • I agree Tommie and saw this interview but one cannot neglect the over macro situation abroad. So far Banks earnings have been good and better than expected mainly due to good expense management and housing is recovering. IMHO RDN is not a good or great short candidate but it is a small cap, has legacy claims, and liquidity concerns therefore quant funds will short at will and push it as low as they can.

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