tommiegun54
7年前
VALUATIONS SHOW MGIC(MTG) UNDERVALUED vs OTHER PMI COMPANIES
MGIC INVESTMENT APPEARS TO BE A GEM AMONGST PEBBLES
These are recent price/earnings ratios and price/book value ratios. Price to book ratio is calculated by dividing the market price of a stock by it's accounting book value on it's Financial Statements issued annually or quarterly:
NAME ...PE ...FWD PE PRICE/BOOK*
MGIC.... 7.35. 7.66 .. 1.12
RADIAN. 8.29. .7.55. . 1.28
ESNT..... 9.54 . 8.28. . 1.80
NMIH . 14.29. .9.24. . 2.34
*S&P 500 AVERAGE PRICE TO BOOK VALUE IS 2.80
MGIC'S P/E ratio is the lowest of the four companies presented here. NMI HOLDINGS has the highest because, analysts expect NMI HOLDINGS to grow it's net income higher in a few years and lower it's P/E ratio, at least that's the ASSUMPTION!
In addition, NMI HOLDINGS also has the highest PRICE/BOOK RATIO. Once again analyst expect, that NMI HOLDINGS'S book price of $11.88 Will grow to $27.33 on it's FINANCIAL Statements in a few years, at least that's the assumption!
The implications of a high price/book value is there is no cash or capital on the balance sheet to back up the inflated price. So, if some financial need arises in the way of liabilities, OH WELL!
Consider putting some money into MGIC, who has been in business for 62 years. They have $1.1 billion in excess cash assets over PMIERS REQUIREMENTS, which theoretically adds $3.11 to it's book vale for a total of $15.82 in book value.
MGIC started the PMI business in 1957 and has the highest net operating income at $660 million annually as of FYE 2018 in the industry.
tommiegun54
7年前
MGIC(MTG) GOOD OPPORTUNITY/ALTERNATIVE TO NMIH
MGIC is expected to end 2019 with a book value of $12.02 according to CREDIT SUISSE ANALYSTS. While NMIH is trading at 2.3 times it's book value. MTG PRICE EARNINGS RATIO IS 7.28 VS 14 for NMIH.
MGIC PAYS A 2% DIVIDEND. MGIC has the highest net operating income of 4 PMI PUREPLAY COMPANIES. They ended 2018 at $660 million NOI.
CASH FLOW/POSITION: 'As of June 30, 2019, we had approximately $333 million in cash and, investments at our holding company. These resources are maintained
primarily to service our debt interest expense."(FROM SEC 10Q JUNE 2019)
If, MGIC WAS TO maintain a cash cushion of available assets EQUAL 20% in excess of requirements, they would have a book value of $13.26.
Capital Adequacy
PMIERs
As of June 30, 2019, MGIC’s Available Assets under PMIERs totaled
approximately $4.4 billion, an excess of approximately $1.1 billion over its
Minimum Required Assets; and MGIC is in compliance with the
requirements of the PMIERs and eligible to insure loans delivered to or
purchased by the GSEs.
Maintaining a sufficient level of Available Assets will allow MGIC to remain in compliance with the PMIERs financial
requirements, including, we believe, to the extent they are revised. Our
reinsurance transactions provided an aggregate of approximately $1.3
billion of PMIERs capital credit as of June 30, 2019.
tommiegun54
7年前
MGIC(MTG) GOOD OPPORTUNITY/ALTERNATIVE TO NMIH
MGIC is expected to end 2019 with a book value of $12.02 according to CREDIT SUISSE ANALYSTS. While NMIH is trading at 2.3 times it's book value. MTG PRICE EARNINGS RATIO IS 7.28 VS 14 for NMIH.
MGIC PAYS A 2% DIVIDEND. MGIC has the highest net operating income of 4 PMI PUREPLAY COMPANIES. They ended 2018 at $660 million NOI.
CASH FLOW/POSITION: 'As of June 30, 2019, we had approximately $333 million in cash and, investments at our holding company. These resources are maintained
primarily to service our debt interest expense."(FROM SEC 10Q JUNE 2019)
If, MGIC WAS TO maintain a cash cushion of available assets EQUAL to 20% in excess of requirements, they would have a book value of $13.26 per share. MTG current market is $12.49 per share.
"Capital Adequacy
PMIERs
As of June 30, 2019, MGIC’s Available Assets under PMIERs totaled
approximately $4.4 billion, an excess of approximately $1.1 billion over its
Minimum Required Assets; and MGIC is in compliance with the requirements of the PMIERs and eligible to insure loans delivered to or purchased by the GSEs."
Data from SEC 10Q JUNE 2019
Mikey Mike
11年前
Moody's Maintains Positive Outlook on Mortgage Insurers
The outlook for the US private mortgage insurance industry over the next 12 to 18 months remains positive, according to "US Mortgage Insurers: Positive Outlook as Industry Increases Capitalization, Legacy Losses Diminish," the latest industry update from Moody's Investors Service.
"In 2015, private mortgage insurers will continue to strengthen their regulatory and economic capital profiles to meet new capital requirements imposed by Fannie Mae and Freddie Mac," said Brandan Holmes, a Moody's vice president. "Stronger capitalization is credit positive and will improve the insurers' resilience as counterparties and therefore the value they offer to housing market participants."
The private mortgage insurers reported a significant improvement in profits for 2014 and are likely to grow profits further in 2015, owing to a steady decrease in new delinquencies as legacy loans burn out and to the growth in profitable post-2008 insurance-in-force that is beginning to generate meaningful earned premiums. In addition, improving US employment trends and moderate house price appreciation will continue to create favorable conditions for the industry.
Core mortgage originations are still below historical levels, and could pressure the insurers' volume of new insurance written, but the constraining factors -- such as the slow rate of household formation, the shift towards rentals, stagnant wage growth and limited access to mortgage credit -- will also continue to recede, with the resulting pent-up demand for housing driving further growth.
On the negative side, the industry could face intensifying competition, with financial strength and balance sheet capacity re-emerging as critical factors, especially if private-label issuance picks up. In addition, as currently drafted, the higher capital requirements could make earning the cost of capital difficult and hurt profitability, particularly for insurers with significant pre-2009 legacy exposures. Other potential negatives include a deterioration in the US economy, owing to, for example, fallout from economic instability in other parts of the world; or a weakening of the private insurers' franchises resulting from Fannie Mae or Freddie Mac-related reform that diminishes the role for private mortgage insurance.
http://www.streetinsider.com/Credit+Ratings/Moodys+Maintains+Positive+Outlook+on+Mortgage+Insurers+(RDN)+(ORI)+(AGO)/10316093.html
Mikey Mike
12年前
Fannie Mae (FNMA) obtained insurance on a pool of about $5 billion of mortgages from National Mortgage Insurance Corp. as the government-controlled company seeks to expand its risk-sharing with private firms.
The transaction resulted from a formal bid process to mortgage insurers, the Emeryville, California-based unit of NMI Holdings Inc. (NMIHZ) said today in an e-mailed statement. The insurer, which began writing policies in April, said that it was selected “based on its favorable terms and conditions, and beneficial risk-share attributes.”
Freddie Mac, the competitor to Fannie Mae that’s also government-controlled, sold $500 million of a new type of debt this month to share its mortgage-default risks with bond investors. That deal was part of an effort to gain insight into how the private sector prices risk and to reduce taxpayers’ exposure to potential losses, Edward DeMarco, acting director of the Federal Housing Finance Agency, said in a statement.
The FHFA, which has overseen the firms since they were seized by the U.S. in 2008, has been directing them to raise how much they charge to guarantee their traditional mortgage bonds and asked each to attempt to share risk this year on $30 billion of home loans. The risk-sharing should take a variety of forms, according to the goals set for the firms’ executives.
While mortgage insurers’ protection on new loans mainly covers debt guaranteed by Fannie Mae and Freddie Mac, the firms typically offer the coverage on a loan-by-loan basis. The insurance is usually paid for by consumers, picked by lenders, and required for debt exceeding 80 percent of a property’s value. The policies cover some or all of foreclosure losses.
The agreement with NMI, struck July 15, was executed to help meet the “FHFA’s 2013 conservatorship scorecard objective,” Washington-based Fannie Mae said in an e-mailed statement. “The effective date of the coverage will be subject to receipt of the applicable regulatory approvals.”
To contact the reporters on this story: Jody Shenn in New York at jshenn@bloomberg.net
To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net
http://www.bloomberg.com/news/2013-07-31/fannie-mae-obtains-insurance-on-5-billion-pool-of-mortgages-1-.html
Mikey Mike
12年前
Fannie Mae’s Credit Risk Sharing initiatives aim to reduce our mortgage default (credit) risk by offering new opportunities for financial institutions to invest in the credit performance of our single-family book of business.
Credit Risk Sharing:
Provides an additional avenue for sharing our mortgage credit risk.
Adds a layer of defense against loss to existing credit risk policies and processes.
Seeks to reduce the government’s participation in the mortgage market.
Benefits:
Enhances our ability to manage credit risk.
Allows us to share credit risk on our guaranty book of business with private market participants.
Reduces taxpayers’ credit risk exposure on Fannie Mae’s guaranty business.
Fulfills our public policy goal to re-start private investment in mortgage credit risk and aligns with objectives set forth in FHFA’s 2013 Conservatorship Scorecard.
Our goal is to develop multiple forms of risk-sharing with private market participants. Below are examples of transactions we are using to share credit risk.
Connecticut Avenue Securities are designed to share credit risk on a portion of our strongest performing single-family book—newly-originated, qualifying mortgage loans that are underwritten using strict credit standards and enhanced risk controls (implemented post housing crisis). Fannie Mae’s first credit-linked debt offering was priced on October 15, 2013. The Connecticut Avenue Securities program aims to offer ongoing investment opportunities that are scalable, and flexible enough to respond to market feedback, and are designed to have minimal, if any, impact on the To Be Announced (TBA) market.
An agreement with National Mortgage Insurance Corp. (National MI) to insure a pool of loans with an unpaid principal balance of over $5 billion was executed on July 15, 2013. This transaction entailed using a pool mortgage insurance policy to transfer a portion of the risk on a pool of high quality loans that Fannie Mae acquired in the fourth quarter of 2012.
http://www.fanniemae.com/portal/funding-the-market/credit-risk/
Mikey Mike
12年前
Fannie Mae Shares Credit Risk with National Mortgage Insurance Corporation
Callie Dosberg
202-752-3117
WASHINGTON, DC – Fannie Mae (FNMA/OTC) has finalized an agreement with National Mortgage Insurance Corporation ("National MI") on a transaction to provide credit risk coverage on over $5 billion in single family mortgages. The coverage furthers the 2013 Conservatorship Scorecard goal of transferring risk to private sources of capital. The insurance became effective as of September 1, 2013.
"This insurance policy transfers credit risk away from taxpayers, which is an important element of creating a more sustainable housing finance system," said Andrew Bon Salle, executive vice president for underwriting, pricing and capital markets at Fannie Mae. "We will continue working with FHFA to meet the goals of the Conservatorship Scorecard for 2013 to reduce risk for Fannie Mae and taxpayers."
The National MI policy covers certain loans acquired by Fannie Mae in the fourth quarter of 2012, each of which had an original loan-to-value ratio (LTV) between 70 percent and 80 percent. The terms of the policy result in Fannie Mae’s exposure on these loans being reduced to approximately 50 percent LTV, subject to a deductible amount and aggregate loss limits.
Among other provisions, the Conservatorship Scorecard for 2013 asks Fannie Mae to transfer credit risk on at least $30 billion of single-family loans that the company owns. Additional transactions are expected this year in order to meet the goals of the Scorecard.
http://www.fanniemae.com/portal/about-us/media/financial-news/2013/6025.html
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