2024-04-19 17:31:11 ET
Summary
- MGIC's stock fell by 13% due to a spike in the 10-year Treasury bond yield, making it a good time to invest.
- Q1 forecast for MGIC predicts flat insurance revenues, but higher investment income and 6% fewer shares than a year ago.
- Higher interest rates have little impact on MGIC's credit risk and insurance policy pricing.
- Higher rates has slowed insurance book growth, but created an opportunity for more value-added share repurchases.
- The stock could be 50% higher in 2-3 years.
I was planning on writing my usual quarterly earnings article on private mortgage insurer MGIC ( MTG ) after it reported on May 1, but the stock has fallen by 13% since March 28 as a result of a 44 bps spike in the 10-year Treasury bond yield to 4.65% at present. So I concluded that the time to suggest an investment is now....
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Buy MGIC: Higher Interest Rates Create A Buying Opportunity