The stocks of two different mortgage insurers got the go ahead nod from MKM Partners, the institutional research and trading firm, both with a Buy rating.

MKM Partners initiated MGIC Investment Corp. (MTG) with a Buy and price target of $11, noting how critical mortgage insurance has become since the housing crisis.

“Credit quality is very good, home values are generally appreciating, premium rates are nearly double what they were pre-crisis and required capital is up only 30-40%, but likely to move a tad higher following PMIERs implementation,” the firm said in a client note.

For the same reasons, MKM Partner also initiated Radian Group (RDN) initiated with a Buy and a target price of $22.

“Credit quality remains strong, home values are still appreciating, premium rates are nearly double what they were pre-crisis and required capital is up only 30-40%, but likely to move a bit higher following PMIERs implementation,” MKM said. “Finally, the 2006-2008 loans are quickly becoming a much smaller part of the story. Against this backdrop, firm encourages investors to consider company’s shares if they are looking to gain exposure to a financials firm with improving return potential.” 
A little after noon, MGIC was down less than 1%, while Radian was up less than 1%.