U.S. markets open in 3 hours 18 minutes
  • S&P Futures

    3,760.50
    -5.00 (-0.13%)
     
  • Dow Futures

    30,849.00
    -29.00 (-0.09%)
     
  • Nasdaq Futures

    12,416.00
    -39.00 (-0.31%)
     
  • Russell 2000 Futures

    2,140.40
    -4.10 (-0.19%)
     
  • Crude Oil

    65.02
    +1.19 (+1.86%)
     
  • Gold

    1,691.80
    -8.90 (-0.52%)
     
  • Silver

    25.31
    -0.16 (-0.61%)
     
  • EUR/USD

    1.1935
    -0.0044 (-0.37%)
     
  • 10-Yr Bond

    1.5500
    0.0000 (0.00%)
     
  • Vix

    28.17
    +1.50 (+5.62%)
     
  • GBP/USD

    1.3809
    -0.0085 (-0.61%)
     
  • USD/JPY

    108.5290
    +0.5530 (+0.51%)
     
  • BTC-USD

    47,353.00
    -2,027.78 (-4.11%)
     
  • CMC Crypto 200

    947.03
    -40.18 (-4.07%)
     
  • FTSE 100

    6,664.72
    +13.84 (+0.21%)
     
  • Nikkei 225

    28,864.32
    -65.79 (-0.23%)
     

Here's Why Hold is an Apt Strategy for NMI Holdings (NMIH)

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

NMI Holdings NMIH is well-poised for growth on new primary insurance written, direct primary insurance in force and an improving risk-based capital ratio. The company has a stellar track of delivering positive surprise in the last 13 quarters, reflecting operational excellence.

The stock has seen its estimates for 2020 and 2021 move 17.1% and 0.9%, respectively in the past 30 days, reflecting investor optimism. The company’s return on equity (ROE) has improved over the past three years, reflecting effective utilization of shareholder funds. Its trailing 12-month ROE of 15.7% betters the industry average of 5.6%. The company aims to generate solid mid-teens returns for its shareholders.

This Zacks Rank #3 (Hold) mortgage insurer’s solid portfolio should continue to drive earnings. The company is poised to benefit from strong mortgage origination market and increased private mortgage insurance penetration rates.

NMI Holdings has a comprehensive reinsurance program in place on nearly its entire in-force portfolio. A quota share reinsurance arrangement aids the company in securing additional reinsurance capacity. Moreover, the company has already been using individual risk underwriting and granular Rate GPS pricing to target a higher quality mix of business.

NMI Holdings boasts a strong capital position with improving leverage over the years. It upsized its revolving credit facility to $110 million. The company enjoys strong credit ratings from credit rating agencies and also improved its risk-to-capital ratio.

Shares of NMI Holdings have lost 33.9% year to date compared with the industry’s decrease of 6.1%.

The stock carries a favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.

Stocks to Consider

Some better-ranked companies from the same space are Alleghany Y, The Hanover Insurance Group THG and American Financial Group AFG.    

Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank.

The Hanover Insurance Group delivered an earnings surprise of 9.85% in the last reported quarter. It currently sports a Zacks Rank #2 (Buy).

American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Hanover Insurance Group, Inc. (THG) : Free Stock Analysis Report
 
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
 
Alleghany Corporation (Y) : Free Stock Analysis Report
 
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research