On Mar 3, MGIC Investment Corp. MTG touched a 52-week high of $9.73. The rise in the stock was propelled by strong fourth-quarter earnings which outpaced the Zacks Consensus Estimate by a good 35.7%. About 18.1 million shares exchanged hands in the last session.
Growth Drivers
MGIC Investment’s strong fourth-quarter financial performance was a continuation of superior results and attractive revenue and earnings growth. Investors are optimistic on the stock given that MGIC Investment delivered a positive surprise in six out of the past seven quarters, with the average earnings of 65.8%.
In the just-reported quarter, the company’s operating income of 19 cents per share surpassed the Zacks Consensus Estimate of 14 cents and improved from the year-ago loss of 1 cent per share.
Along with the bottom line, MGIC Investment’s top line also cheered investors beating the Zacks Consensus Estimate.
Book value per share, a measure of net worth, increased 39.1% year over year to $3.06.
Investors’ confidence in the stock also stems from the company’s strong operating numbers revealed for Jan 2015 that continued its long streak of strong operating statistics. The trend reflected a decline in the delinquency level and an improvement in new business written.
Estimate Revision Shows Strength
Driven by optimism surrounding the stock, over the last 30 days, the Zacks Consensus Estimate for 2015 earnings per share climbed 8% to 94 cents per share. For 2016, earnings estimates have gone up 3% to 1.02 per share.
MGIC Investment carries a Zacks Rank #1 (Strong Buy).
Stocks to Consider
Other stocks worth considering include Assured Guaranty Ltd. AGO, Cigna Corp. CI and FBL Financial Group Inc. FFG. While Assured Guaranty carries the same Zacks Rank as MGIC Investment, FBL Financial and Cigna carry a Zacks Rank #2 (Buy).
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