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MGIC Investment (MTG) Up 6.2% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for MGIC Investment Corporation (MTG - Free Report) . Shares have added about 6.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
MGIC Investment Q3 Earnings Top & Rise Y/Y
MGIC Investment Corporation reported third-quarter 2017 operating net income per share of 32 cents, having surpassed the Zacks Consensus Estimate as well as the year-ago earnings by 28% on lower losses.
Insurance in force improved while claims declined year over year. Also, expense ratio remained low.
MGIC Investment recorded total operating revenue of $270 million, nudging up about 0.4% year over year on higher net investment income.
New insurance written was $14.1 billion in the reported quarter, marginally down 0.7% from $14.2 billion in the year-ago quarter on higher insurance written in the quarter.
As of Sep 30, 2017, the company’s primary insurance in force was $191 billion, up 6.1% year over year.
Persistency or the percentage of insurance remaining in force from the preceding year was 78.8% as of Sep 30, 2017. The company had recorded persistency of 78.3% as of Sep 30, 2016.
Percentage of delinquent loans, including bulk loans, was 3.19% as of Sep 30, 2017 compared with 4.14% as of Sep 30, 2016.
Primary delinquent inventory declined nearly 19.8% year over year to $41.2 billion worth of loans.
Net underwriting and other expenses totaled $42.9 million, up 6.2% year over year.
Losses incurred in the quarter significantly narrowed to $29.7 million from $60.9 million in the year-ago quarter. This enormous $38-million reduction in losses was driven by a positive development on the company’s primary loss reserve. This apart, the company witnessed a lesser number of new delinquent notices and a lower claim rate.
Total loss and expenses contracted 55% year over year to $85.9 million due to lower losses.
MGIC Investment expects new business combined with an expected increase in persistency. This in turn should help the company continue to improve its insurance in force.
Financial Update
Book value per share, a measure of net worth, jumped nearly 13% year over year to $8.45 as of Sep 30 30, 2017.
As of Sep 30, 2017, MGIC Investment had $250.7 million in cash and investments, down 8.7% year over year.
Risk-to-capital ratio was 11:1:1 as of Sep 30, 2017 compared with 12.6.1:1 as of Sep 30, 2016.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
At this time, MGIC Investment's stock has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.
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MGIC Investment (MTG) Up 6.2% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for MGIC Investment Corporation (MTG - Free Report) . Shares have added about 6.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
MGIC Investment Q3 Earnings Top & Rise Y/Y
MGIC Investment Corporation reported third-quarter 2017 operating net income per share of 32 cents, having surpassed the Zacks Consensus Estimate as well as the year-ago earnings by 28% on lower losses.
Insurance in force improved while claims declined year over year. Also, expense ratio remained low.
MGIC Investment recorded total operating revenue of $270 million, nudging up about 0.4% year over year on higher net investment income.
New insurance written was $14.1 billion in the reported quarter, marginally down 0.7% from $14.2 billion in the year-ago quarter on higher insurance written in the quarter.
As of Sep 30, 2017, the company’s primary insurance in force was $191 billion, up 6.1% year over year.
Persistency or the percentage of insurance remaining in force from the preceding year was 78.8% as of Sep 30, 2017. The company had recorded persistency of 78.3% as of Sep 30, 2016.
Percentage of delinquent loans, including bulk loans, was 3.19% as of Sep 30, 2017 compared with 4.14% as of Sep 30, 2016.
Primary delinquent inventory declined nearly 19.8% year over year to $41.2 billion worth of loans.
Net underwriting and other expenses totaled $42.9 million, up 6.2% year over year.
Losses incurred in the quarter significantly narrowed to $29.7 million from $60.9 million in the year-ago quarter. This enormous $38-million reduction in losses was driven by a positive development on the company’s primary loss reserve. This apart, the company witnessed a lesser number of new delinquent notices and a lower claim rate.
Total loss and expenses contracted 55% year over year to $85.9 million due to lower losses.
MGIC Investment expects new business combined with an expected increase in persistency. This in turn should help the company continue to improve its insurance in force.
Financial Update
Book value per share, a measure of net worth, jumped nearly 13% year over year to $8.45 as of Sep 30 30, 2017.
As of Sep 30, 2017, MGIC Investment had $250.7 million in cash and investments, down 8.7% year over year.
Risk-to-capital ratio was 11:1:1 as of Sep 30, 2017 compared with 12.6.1:1 as of Sep 30, 2016.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
MGIC Investment Corporation Price and Consensus
MGIC Investment Corporation Price and Consensus | MGIC Investment Corporation Quote
VGM Scores
At this time, MGIC Investment's stock has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.