MGIC Investment Corp. (MTG)

[tommiegun54]

SINKS MGIC CEO SELLS MTG AT $13.98, NETS $1.3 MILLION

PATRICK SINKS, CEO OF MGIC, SOLD $1.3 MILLION of his stock at $13.98 per shares weeks prior to the announcement of premium rates reduction on a select few of MGIC insurance products, that drove MTG down over 15% as investors have reacted in fear.

He and a total of 17 board members and key officers also SOLD shares at an average $13.98 of company stock over weeks prior to the premium rate announcement.

The announcement of premium rates reductions has sent shock waves throughout the the private mortgage insurance INVESTMENT community with losses in shares prices of Essent Guaranty, Radian, National, Arch Capital all losing in excess of 10% in value or more.

Investors have overreacted wildly, when in fact little has changed. MGIC released earnings of $.38 cents per share beating analyst estimates on Wednesday morning. If, you roll back the decision to place cash into reserves of $61 MILLION, earnings would have been $54 cents a share approximating Q4 2017's $.55 cents a share.

So, what's the big deal? It's the perception that the PMI marketplace will turn into a battlefields, leaving PMI COMPANIES without profits.

In addition, every time a rate adjustment is announced or proposed by the FHA, there is a wild reaction by the investment community.

Research into the History of rate adjustments over the last few years has shown the premium rate adjustments end up having little or no impact on profits in the long run, as all the players in the industry have continued to show higher revenue and profit in terms of the companies mentioned above.

The marketshare reduction by the FHA is bringing an abundance of prosperity to the PMI INSURANCE sector as the FHA continues to pull back the government's risk exposure in favor of private capital.