While AGO is on much more solid ground here, there are a few hurdles ahead. So far so good. 1) We need to see Oper Earnings improvement, biz hasn't been as good the last couple of quarters, 2) We need to get S&P on "our" team and that is not so easy for a monoline. 3) We need to real economic growth and states getting their financial houses in order, all but 14 look pretty good. 4) We need to see investors rotate/allocate more capital toward financial stocks, the sector has been "stink-O". I predict AGO to $60-80 stock in 2014, provided we see growth for credit improvement products...I'm thinking growth in structured finance could blow the top of the stock if that business heats-up in an economic rebound. The secret weapon at AGO is the EXCELLENT management....and they are in it for the long haul.
this is a pretty tough business to be in historically, with low ROEs due to capital requirements and subject to big losses if one gets it wrong. but ago is the only viable game in town and agree, good management with patience. this firm can take business that FNMA is exiting and provide muni biz. it's a long term play, but a good play for a patient investor. this will go up over the next 3/5/10 year period. it's the only game in town here. it's the only firm with good ratings. the only firm with adequate capital to support its guarantees. it's the only firm with good, competent management. and it's the only firm with wilbur ross's deep financial backing. this should be trading much higher than this price, but mbia is an anchor on the industry. over time, and ross knows patience and time horizons, the 2 firms will trade independently. as such, this is the time to accumulate ago and ignore mbia or short it as i have done. nothing person, just reasoned business.... -RM
The same for me. Patience as the ST trends make no empiracle sense. AGO is well capitalized, well rated and viable albeit in niche markets. MBIA has no capital, facing tons of suits, has no ratings and no business. This will play out and buy on the dips. I have a mbia short position. Tried to double it but Fidelitiy couldn't get any shars to short. All the float is shorted. The says it all -- short squeeze.