Why MTG can reach $100 in a few years? Strong Housing Market plus Mortgage Market Privatization.
Strong Housing Market plus Mortgage Market Privatization:
“An underlying theme of yesterday’s Senate hearing was the quest for private capital to reenter the mortgage market,” Mills said in the note. “There was support for recent market share gains by private mortgage insurers.”
Private insurers had 32 percent of the market last year, according to data from Inside Mortgage Finance. That compares with 23 percent in 2011 and 77 percent in 2006, before the housing slump.
Back in 2007, MTG had more than $10 billion in cash, that is, $50 per share. Right now, it has $5.3 billion
in cash and $1.3 billion annual revenue. I expect MTG's cash to start increasing again from 2014.