MGIC Investment Corp. (MTG)

[tommiegun54]

UPDATE PRICE/BOOK VALUE PMI PURE-PLAY COMPANIES

NAME. . . . . PRICE/BOOK
MGIC . . . . . .89*
RADIAN. . . . ..97
ESSENT G. . . 1.23
NMI HDGS. . . .1.49

*MTG IS SELLING AT $.89 CENTS ON THE DOLLAR, WHILE NMI HOLDINGS IS SELLING AT $1.49 PER DOLLAR.

Now that playing field has been leveled by covid-19 and, the upstarts had to issue stock and borrow money to build their "loan loss reserve and lae", the novelty is worn off. Therefore, they should all have similar price/book.

INHERENT VALUE NOT SEEN: MGIC has a higher reserve compared to the OTHER PMI companies.

RESERVE PER POTENTIAL CLAIM
MGIC INVESTMENT COMPANY $15,100
RADIAN. $12,168
ESSENT GUARANTY. $11,900
NMI HOLDINGS. $7,400

For every delinquency cleared from delinquency inventory, MGIC WILL HAVE $15,100 TO CLAIM AS PROFIT OR TO HOLD AS A CASH RESOURCE.

FOR EVERY DELINQUENCY REMOVED FROM DELINQUENCY INVENTORY FOR NMI HOLDINGS, THEY WILL HAVE $7,400 FOR PROFIT OR OTHER CASH RESOURCES.

MGIC WILL HAVE $7,700 MORE THAN NMI HOLDINGS FOR EVERY DELINQUENCY REDUCTION. THE HIGHER RESERVE FOR MGIC GIVES IT A "COMPETITIVE ADVANTAGE" IN CASH GENERATION COMPARED TO THE OTHER PMI COMPANY'S.

EVENTUALLY MGIC COULD PUT THE CASH ADVANTAGE TO WORK. DURING THE EARNINGS CONFERENCE S, THAT'S THE MOST ASKED QUESTION, "WHAT WILL THEY DO WITH ALL THE CASH."