Radian Group Inc. Message Board

Exmo,

I prefer to say I pulled out early...and won't be regret it 9 months from now. ;-)

Bernie,

The hindsight glasses can always make a sell look "too early". To hard to "top tick" it.

Yes, I may give up more upside, but its keeping losses in check that leads to great wealth. I am not complaining about being up 140% in 8 months.

Sentiment: Strong Buy

Results may also show that sales of larger homes are exceeding projections. Interest rates are so low, that the affordability quotient lets the average "good credit" buyer look to spend more. Hovnanian expressed surprise at this phenomenon, as well, at the Wells Fargo conference.

One thing I will be looking at very closely in the report is how dependent HOV will be going forward on partnering with Blackstone to acquire new land. Clearly, this is a cost that is not incurred in a normalized market, but if HOV's balance sheet improves to allow it to begin weaning from this process, yet another good sign the good times are returning.

Looks like no analyst will stick his neck out, ahead of the quarter, until there is confirmation that the water is safe. By that time, it will be too late.

Saw that happen with big long positions in RDN and MTG. Now those names are too ho (sold both the other day). HOV looks a lot RDN when it was trading at $6 a few months ago. Same "balance sheet" issues too, which kept the very stubborn short base intact, when the good news broke.

Sentiment: Strong Buy

My thesis is profitability may be in the cards for the earnings out on June 6th.

Clearly, when HOV last reported for the quarter ending January 31st, no one was predicting the housing inventory shortage leading to price increases. We know now, from the Wells Fargo conference, two weeks ago, that HOV was able to pass on a 15% price increase for new homes in Northern California.

Maybe the results will not show until next quarter, when these new homes close. In any case, it does not appear that analysts have updated their estimates to reflect this new dynamic. And when HOV reports, the analysts will ignore the current report and focus on projections for the second half, particular if Ara Hovnanian definitively confirms that the turn is at hand, and that analysts should raise guidance for the second half.

A promising sign here in my home state of New Jersey, where the real estate market has lagged other parts of the country, is that HOV now seeing a meaningful uptick in buying interest. One subdivision, in particular, in Central Jersey sold out the entire first section (21 homes) in the opening weekend. Inventory scarcity now pervades even the harder hit areas of the great recession. This should translate to meaningful improvement in the second half, particularly in HOV's largest markets in the Northeast and Mid-Atlantic. The Houston real estate market, one of the hottest in the nation, is also an area where HOV has made big bets. That may provide a bump for the current quarter, as well.

Sentiment: Buy

Depends on the backdrop.

If its a stock specific pullback, it may be somewhere in the $11's.

But I think the more likely case is a broader market correction. The longer this bull market rally goes, the more sharp the correction will likely be. Might even dip back into the $10's, particularly if the correction is based on the economy showing more signs of weakness.

My crystal ball isn't working, so have to be flexible.

Sentiment: Buy

No! The rats are jumping off the ship. Finally, some well deserved profit taking after a big run. Last correction ran for about 3-4 days, if I recall. And if mother stock market joins the fray, there is more downside to come.

I am waiting.

Sentiment: Strong Buy

Houston market has steady velocity of 1,200-1,400 homes.

Sentiment: Strong Buy

Did you listen to the same presentation? I did hear that sales price appreciation is up 15% over the last 6 months in Northern California. But new home sales were 400K at the market bottom, have trended up to 600k currently, but remain below the historic norm of 1 million per year. At the market top, sales were 2 million homes.

As far as market velocity, Hovnanian indicated annual rate during off peak Q1 was 24 homes per subdivision 2012 was 28; at the bottom, rate dropped to 19 homes; historic normalized rate is 40-45 homes; peak was mid-50's.

Gross Margins will continue trending positively through 2013-14; SGA has remained flat with efficiencies expected offset increasing costs.

One surprise is the amount of larger homes being sold; trend is reversing with lower mortgage rates increasing affordability. multi-family sales lower than expectations, likely due to tight credit lending standards.

Sentiment: Strong Buy

Hey Tom,

Looks like I let go my RDN and MTG a day too early. Froth meter is dinging big time.

Have you kicked the tires on HOV yet? Benefiting from the housing recovery, has some legacy financial issues to work through (RDN and MTG ring a bell?), and short interest of 32.5%. Has not experienced the same big runs as RDN and MTG, but if there is a rotation, I could see some RDN longs moving over to HOV. Less downside risk in the short term.

One thing that would be a catalyst is news of less restrictive lending standards.

And I like the fact their earnings report will be out a month before RDN and MTG. Better news will be reported sooner.

Your thoughts?

Only thing that will cause a big pop upwards would be announcement of a Countrywide settlement. Otherwise, just content to sit back and wait.

Jobless report may not even be a triggering event. Sometimes market just hits exhaustion.

Sentiment: Strong Buy

That is why I favor RDN over other mortgage insurers. At 18-1 right now and management has forecasted staying under 20-1 through the end of this year.

Tommy, if you read the conference call transcript for GNW, there is discussion on the Q & A about pending regulatory changes that may require the private mortgage industry to meet higher reserve standards. Discussion was move to reserve rate somewhere between 18-1 and 20-1 (25-1 is current requirement). Mortgage insurers would be given a grace period to meet the new standard.

Shelf offering will give MTG flexibility to raise more cash, if needed, to meet the standard, whatever it will be.

All I can say is he"s been singing the short tune for quite awhile. And if you followed his advice, you'd be losing $'s in a raging bull market.

Sentiment: Strong Buy

So your acknowledging your fear that your short position is going lead to another 20% loss from here?

Short interest information from April 30th just out. Short interest is down to 10.8% as of April 30th.

However, RDN's shorts remain stubborn and potential roadkill. Short interest in RDN remains at 24.7% from April 30, when it closed at $11.95. If RDN squeezes up, MTG will probably follow in sympathy to some degree.

BTW, the 2:30 P.M. bear raid looks to start soon. Has happened everyday this week.