It seems that more than just private mortgage insurers themselves are expecting a big year for the industry.
On Wednesday, Bradley Shuster, president and CEO of NMI Holdings, Inc. (NMIH), the parent company of National Mortgage Insurance Corp., told a group of investors that a recovery in the housing market and the high cost of FHA mortgage insurance could lead to a boost in business for private mortgage insurers.
Maverick Capital has joined Shuster in predicting a lucrative year for private mortgage insurers. Maverick has established a new stock price target for Radian Group (RDN) of $26.20. The company’s stock closed Thursday at $14.31.
Maverick is also predicting a big year for fellow private mortgage insurer MGIC Investment Corp. (MTG). Maverick has established a new stock price target for MGIC of $16.50. MGIC closed Thursday at $8.28.
The predictions can’t come as big shock considering that both companies reported big profits in the first quarter. Radian’s net income for the first quarter was $203 million and MGIC’s net income was $60 million.