01:43 PM EDT, 06/13/2013 (MidnightTrader) -- Credit Suisse analysts have raised their target price on shares of MGIC Investment Corp. (MTG:$6.13,00$0.06,000.99%) and Radian Group Inc (RDN:$12.86,00$-0.02,00-0.16%) ."
"We are increasing our target prices on Radian to $12.00 (from $11) and to $5 (from $4.50) for MGIC to reflect higher new business volumes and better near-term profitability. Despite the higher target prices, we see that the favorable trends are already priced into the shares; we are maintaining our Neutral on Radian and Underperform on MGIC," said Credit Suisse.
"May NIW was higher than expected for both Radian and MGIC, leading us to increase our full year 2013 NIW forecast. We now expect the private MI sector to write $219 billion of new policies for the year, an 25% increase from last year. This level of increased volume is being driven by a 8% market share gain from the FHA. Market share gains should continue in 2014, but the 28% decline in overall volumes leads to flat industry volumes."
"For the past 2 years the competitive environment for the private mortgage insurers has become more favorable as competitors have left the business. This has allowed the remaining players, and Radian in particular, to gain market share. We expect this trend to begin to reverse itself over the course of 2013 given Arch Capital's purchase of CMG (legacy PMI) and the recent (January) approval of NMI Holdings to begin to write business."
"Following their first quarter capital raises, both Radian and MGIC continue to use reinsurance to help manage risk to capital ratios. While Radian has reduced its reinsurance to 5% of NIW, MGIC is reinsuring 30%. This reinsurance limits the impact of the highly profitable NIW and reduces normalized earnings power with the impact more sizeable at MGIC."
"We assume that current 30%+ (pre-tax) returns continue on the 2009-2013 vintages before dropping to the low 20
Until recently, China had seen decades of unprecedented growth, driving up the price of commodities amid increasing demand.
But the world's second largest economy disappointed in the first quarter of this year, growing by just 7.7 percent , from 7.9 percent in the previous three months. It followed the slowest rate of annual growth in 13 years in 2012, and last week, the International Monetary Fund cut its 2013 growth outlook for China from 8 percent to 7.75 percent.
The accompanying slowdown in China's appetite for commodities has put downwards pressure on their prices, with the cost of almost all of the main traded commodities falling in the first quarter of this year.
(Read More: 'Rude Shock' Ahead for Commodity Currencies: Pro )
One striking example is copper, which has slipped by around 16 percent over the year to date. Three-month copper on the London Metal Exchange slumped to an 18-month low of $6,762.25 a tonne in April and was trading at around $7,335 on Monday morning in London.
Dramatic price slumps like this have led some analysts to claim the commodity supercycle is coming to an end. Last month, Citigroup's commodities team said 2013 would be the year in which the "death bells ring" for the supercycle , and last week, Saxo Bank's chief economist said the cycle is "winding down."
The Middle of the Storm
This potential change to the commodity landscape should motivate countries to put their fiscal houses in order, Giugale said.
"They should sort out government accounts, not run large deficits and have a large cushion available to provide more social protection and assistance," he said. "They should also allow their central banks to fight the inflationary pressure that a crisis like a crash in prices might generate. These two macroeconomic pillars, to me, are sacrosanct."
The prioritization of investment was also key, Columbia University's Erten said.
Great question! Why do people fall for the old pump it up and sell it! Down 5% what a dump.
BREAKOUT WATCH for possible breakout above 6.55, no resistance in area just above.
Type: Continuation breakout from single resistance.
Target: 7.66, 19.9% Stop: 6.04, Loss: 5.5%, Profit/Loss ratio: 3.6 : 1 - Excellent
Look at RDN gap up in P/M. MTG will follow. Options will not hold it back. MTG will trade in the 6.20s
those two cos. have a combined market cap of a whopping 30+ million. If they are worth anything HEK would buy them. No thks. Good luck with those.
In @ 3.61
Looks like an institution has been unloading a large position the last several sessions. When they are done HEK move up.
hey yoyo0000 keep looking for it. Also watch the shr price rise too. tough to be blind and helpless!!