The next day, they'd be skinny, rangy cattle again, and the buyer would exclaim, "I've been sold watered stock!" Over the years, "watering the stock" has come to refer to the practice of companies issuing additional stock, and thereby, diluting its value.
It stands to reason that if watering stock is bad, then decreasing shares outstanding is good. After all, if there are fewer shares, they should be worth more, all other things being equal. But corporate buybacks are rarely the good things that companies promote them as ��and they can be a warning sign that management simply has no idea what to do with its money.
Top 5 Electric Utility Companies For 2015: MGIC Investment Corp (MTG)
MGIC Investment Corporation (MGIC), incorporated June 21, 1984, is a holding company and through wholly owned subsidiaries is a private mortgage insurer in the United States. As of December 31, 2012, its principal mortgage insurance subsidiaries, Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC), were each licensed in all 50 states of the United States, the District of Columbia and Puerto Rico. During the year ending December 31, 2012, the Company wrote new insurance in each of those jurisdictions in MGIC and/or MIC. The Company capitalized MIC to write new insurance in certain jurisdictions where MGIC no longer meets, and is unable to obtain a waiver of, those jurisdictions��minimum capital requirements. Private mortgage insurance covers losses from homeowner defaults on residential mortgage loans, reducing and, in some instances, eliminating the loss to the insured institution if the homeowner defaults.
Mortgage Insurance
Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure. Primary insurance is written on first mortgage loans secured by owner occupied single-family homes, which are one-to-four family homes and condominiums. Primary insurance is also written on first liens secured by non-owner occupied single-family homes, which are referred to in the home mortgage lending industry as investor loans, and on vacation or second homes. Primary coverage can be used on any type of residential mortgage loan instrument approved by the mortgage insurer.
When a borrower refinances a mortgage loan insured by the Company by paying it off in full with the proceeds of a new mortgage that is also insured by it, the insurance on that existing mortgage is cancelled, and insurance on the new mortgage is considered to be new primary insurance written. Therefore, continuation of its coverage fr! om a refinanced loan to a new loan results in both a cancellation of insurance and new insurance written. When a lender and borrower modify a loan rather than replace it with a new one, or enter into a new loan pursuant to a loan modification program, its insurance continues without being cancelled assuming that the Company consent to the modification or new loan.
The borrower�� mortgage loan instrument requires the borrower to pay the mortgage insurance premium. There are several payment plans available to the borrower, or lender, as the case may be. Under the monthly premium plan, the borrower or lender pays it a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to it in advance, and it earns and recognizes the premium over the next 12 months of coverage, with annual renewal premiums paid in advance thereafter and earned over the subsequent 12 months of coverage. Under the single premium plan, the borrower or lender pays it a single payment covering a specified term exceeding twelve months.
Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan, which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. In general, the loans insured by it in Wall Street bulk transactions consisted of loans with reduced underwriting documentation; cash out! refinanc! es, which exceed the standard underwriting requirements of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively GSEs); A- loans; subprime loans, and jumbo loans.
Other Products and Services
The Company has participated in risk sharing arrangements with the GSEs and captive mortgage reinsurance arrangements with subsidiaries of certain mortgage lenders, which reinsure a portion of the risk on loans originated or serviced by the lenders, which have MGIC primary insurance. It provides information regarding captive mortgage reinsurance arrangements to the New York Department of Insurance (known as the New York Department of Financial Services), the Minnesota Department of Commerce and the Department of Housing and Urban Development, (HUD). It performs contract underwriting services for lenders, in which it judges whether the data relating to the borrower and the loan contained in the lender�� mortgage loan application file comply with the lender�� loan underwriting guidelines. It also provides an interface to submit data to the automated underwriting systems of the GSEs, which independently judge the data. These services are provided for loans, which require private mortgage insurance, as well as for loans that do not require private mortgage insurance. It provides mortgage services for the mortgage finance industry, such as portfolio retention and secondary marketing of mortgages.
The Company competes with Federal Housing Administration, Veterans Administration, PMI Mortgage Insurance Company, Genworth Mortgage Insurance Corporation, United Guaranty Residential Insurance Company, Radian Guaranty Inc., CMG Mortgage Insurance Company, and Essent Guaranty, Inc.
Advisors' Opinion:- [By David Hanson and Matt Koppenheffer]
In this segment of The Motley Fool's everything-financials show,�Where the Money Is, banking analysts Matt Koppenheffer and David Hanson dicuss earnings from MGIC Investment Corp. (NYSE: MTG ) and look ahead to Radian (NYSE: RDN ) 's (NYSE: RDN ) quarterly results.
- [By Ben Levisohn]
MGIC Investment (MTG) was not to supposed to turn a profit during the quarter. If the analysts were right, the mortgage insurer’s second-quarter profit was supposed to be a blip and MGIC would return to its money-losing ways.
Associated PressThat’s not quite what happened. MGIC reported a profit of 4 cents a share versus forecasts for a loss of 10 cents, according to FactSet and MGIC’s shares popped 14% to $8.29.
Its big day has also boosted other insurers. Radian Group (RDN) has risen 7.2% to $14.39, while Old Republic International (ORI) has advanced 2.1% to $15.24, Genworth Financial (GNW) is up 3.6% at $13.41 and MBIA Inc. (MBI) has jumped 4.3% to $10.76.
Susquehanna’s Jack Micenko credits a better economy with boosting earnings:
The beat was driven by lower loss reserving – $180 mln versus our estimate of $225 and the consensus estimate of $240, as favorable economic trends helped drive their default book claim rate and severity lower…
Micenko expects MGIC’s shares to hit $13, a 57% gain from its current price.
- [By Paul Ausick]
Big Earnings Movers: Bank of America Corp. (NYSE: BAC) is up 2.3% at $14.56 on decent results. MGIC Investment Corp. (NYSE: MTG) is up 14.9% at $8.34. PepsiCo Inc. (NYSE: PEP) is up 2.1% at $82.27 on better snack sales. Intel Corp. (NASDAQ: INTC) is up 1.3% at $23.68 on modest results. Yahoo! Inc. (NASDAQ: YHOO) is down 0.9% at $33.09 and probably deserves more love than it�� getting.
Top 10 Forestry Companies To Invest In Right Now: WisdomTree SmallCap Earnings Fund (EES)
WisdomTree SmallCap Earnings Fund (the Fund) seeks investment results that correspond to the price and yield performance of the WisdomTree SmallCap Earnings Index (the Index). The Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the United States stock market. The Index consists of the companies in the bottom 25% of the market capitalization of the WisdomTree Earnings Index after the 500 largest companies have been removed. Companies must be incorporated and listed in the United States, and must have generated positive cumulative earnings over their most recent four fiscal quarters prior to the Index measurement date. The Index is earnings-weighted in December to reflect the proportionate share of the aggregate earnings each component company has generated. Companies with greater earnings generally have larger weights in the Index. Its investment advisor is WisdomTree Asset Management, Inc. Advisors' Opinion:- [By Philip Springer]
WisdomTree SmallCap Earnings Fund (EES) follows earnings generated by companies in the small-cap universe of the US stock market.
Furthermore, the fund looks to weight by earnings, giving bigger weights to firms that earn more, irrespective of market capitalization.
Top 10 Forestry Companies To Invest In Right Now: Oil and Natural Gas Corporation Ltd (ONGC)
Oil and Natural Gas Corporation Limited (ONGC) is an India-based company. The Company is mainly engaged in the oil exploration and production activities. The Company operates in two segments: Offshore and Onshore. Its subsidiaries include ONGC Videsh Limited (OVL), Mangalore Refinery & Petrochemicals Ltd., ONGC Nile Ganga BV, ONGC Narmada Limited, ONGC Amazon Alaknanda Limited, ONGC Campos Ltda, ONGC Nile Ganga (Cyprus) Ltd. and ONGC Nile Ganga (San Cristobal) B.V. Advisors' Opinion:- [By Lyubov Pronina]
Reliance Industries Ltd. (RIL) and Oil & Natural Gas Corp. (ONGC), India�� biggest energy explorers, led Indian stocks higher as the nation�� cabinet agreed to lift the price of natural gas. The rupee posted the biggest quarterly drop since 2011.
- [By Zahra Hankir]
India�� (SENSEX) benchmark stock index fell for a fourth day, capping its biggest weekly loss in three months, as the rupee dropped to a six-week low. HDFC Bank Ltd. (HDFCB) dropped 1.9 percent, leading a gauge of banking shares to a fifth day of losses, the longest losing streak since July. Oil & Natural Gas Corp. (ONGC) slid to a three-week low, leading a slide in the S&P BSE India Oil & Gas Index.
Top 10 Forestry Companies To Invest In Right Now: Kronos Worldwide Inc (KRO)
Kronos Worldwide, Inc. engages in the production and marketing of titanium dioxide pigments (TiO2) primarily in Europe and North America. It produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for products, such as coatings, paints, plastics, papers fibers, and ceramics, as well as for various specialty products, including inks, food, and cosmetics. The company also offers ilmenite, a raw material used directly as a feedstock by sulfate-process TiO2 plants; iron-based chemicals, which are co-products and processed co-products of the TiO2 production process and used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as in the manufacture of iron pigments, cement, and agricultural products; and titanium oxychloride and titanyl sulfate that are side-stream products from the production of TiO2. Its titanium oxychloride is used in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones, and other electronic devices; and titanyl sulfate is used in pearlescent pigments, natural gas pipe, and other specialty applications. In addition, the company provides technical services. Kronos Worldwide, Inc. sells its products through distributors and agents to paint, plastics, decorative laminate, and paper manufacturers under the Kronos brand name. The company was founded in 1989 and is headquartered in Dallas, Texas. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc.
Advisors' Opinion:- [By GuruFocus]
Kronos Worldwide Inc. (KRO): Vice Chairman of the Board and CEO Steven L. Watson Bought 14,250 Shares
Vice Chairman of the Board and CEO of Kronos Worldwide Inc. (KRO) Steven L. Watson bought 14,250 shares during the past week at an average price of $14.81. Kronos Worldwide Inc. is a Delaware Corporation. The company is a global producer and marketer of value-added titanium dioxide pigments (TiO2). Kronos Worldwide Inc. has a market cap of $1.72 billion; its shares were traded at around $14.81 with a P/E ratio of 42.60 and P/S ratio of 0.95. The dividend yield of Kronos Worldwide Inc. stocks is 4.05%. Kronos WorldwideInc. had an annual average earnings growth of 5.4% over the past 10 years.
- [By Ben Levisohn]
Typically, when the chairman of a company dies, its shares drop. That hasn’t been the case for Valhi (VHI), Kronos Worldwide (KRO) and NL Industries (NL), which have all advanced today after Harold Simmons passed away.
- [By Laura Brodbeck]
Notable earnings releases expected on Thursday include:
Dollar General Corporation (NYSE: DG) is expected to report fourth quarter EPS of $1.02 on revenue of $4.63 billion, compared to last year�� EPS of $0.97 on revenue of $4.21 billion. Kronos Worldwide Inc (NYSE: KRO) is expected to report fourth quarter EPS of $0.01 on revenue of $371.45 million, compared to last year�� loss of $0.12 per share on revenue of $396.80 million. Christopher & Banks Corporation�(NYSE: CBK) is expected to report a fourth quarter loss of $0.03 on revenue of $106.64 million, compared to last year�� loss of $0.11 on revenue of $115.98 million.Economics
Top 10 Forestry Companies To Invest In Right Now: New Residential Investment Corp (NRZ)
New Residential Investment Corp., incorporated on September 26, 2013, is a real estate investment trust. The Company focuses on investing in, and actively managing, investments related to residential real estate. On May 15, 2013, Newcastle Investment Corp. announced that the spin-off of New Residential Investment Corp.
The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management. The Company primarily target investments in excess mortgage servicing rights, residential mortgage backed securities, residential mortgage loans and other related investments.
Advisors' Opinion:- [By Lauren Pollock]
New Residential Investment Corp.(NRZ) and other investors agreed to buy about $3.2 billion of servicing advances from Nationstar Mortgage Holdings Inc.(NSM), part of Nationstar’s plan to reconfigure its acquisition structure. The advances relate to nonagency residential mortgage loans with an unpaid principal balance of about $58 billion. Nationstar shares rose 4.1% to $42.50 in light premarket trading.
Top 10 Forestry Companies To Invest In Right Now: Caribbean International Holdings Inc (CIHN)
Caribbean International Holdings Inc., formerly Caribbean Casino and Gaming Corporation, incorporated on February 12, 2009, is focused in the gaming and entertainment company. The Company has a gaming casino, located in the city of Sousa, in the Dominican Republic. In April 2012, it acquired exclusive rights to distribute Bionic Products' Energy Drinks throughout the Caribbean, South and Central America.
The Sosua Bay Grand Casino provides the gaming and entertainment experience to the Domincan Republic. It is equipped with a state of the art lighting and sound system.
Advisors' Opinion:- [By Peter Graham]
Small cap stocks Caribbean International Holdings (OTCMKTS: CIHN), Blue Water Global Group Inc (OTCBB: BLUU) and Metrospaces Inc (OTCMKTS: MSPC) have been getting some attention lately in various investment newsletters and all three have focused their activities in the Caribbean or South America. However, all three have been the subject of paid promotions which have helped to get them mentions in various investment newsletters. With that in mind, will bets on the Caribbean or South America pay off big for these three small cap stocks and their investors? Here is a quick reality check:
Caribbean International Holdings (OTCMKTS: CIHN) is All About Wings, Mechanical Bulls and Stem CellsFormerly known as Caribbean Casino & Gaming Corp, small cap Caribbean International Holdings operates as a holding company. On Friday, Caribbean International Holdings rose 8.39% to $0.0369 for a market cap of $315,400 plus CIHN is up 985.3% over the past year and up 7,280% over the past five years according to Google Finance.
Top 10 Forestry Companies To Invest In Right Now: Jive Software Inc (JIVE)
Jive Software, Inc. (Jive), incorporated in February 2, 2001, provides a social business software platform. The Company is focused on unlocking the power of the enterprise social graph, which is the extended social network of an enterprise, encompassing relationships among its employees, customers and partners, as well as their interactions with people, content, and business information. The Company's customers use the Company's platform across broad business use cases, such as strategic alignment, that involve all employees, as well as functional use cases that improve the results of specific business activities such as sales execution or customer service. The Company sells its platform primarily through a direct sales force both domestically and internationally. As of December 31, 2012, the Company had 800 enterprise Jive Platform customers. In May 2013, Jive Software Inc acquired StreamOnce Inc.
The Company delivers a social business platform that features the innovation, creativity and ease of uses found in consumer applications combined with the security, flexibility and scalability necessary for enterprise deployment. The Company offers an enterprise-class social platform, purpose-built to enable its customers to manage workplace communication and collaboration. The Company's solution can be deployed across all employees, functional departments and business units. The Company's solution enables the Company's customers to operate both internal and external communities by offering a platform that allows communication and collaboration between and among employees, customers and partners. The Company's platform includes a recommendation engine that helps users connect to and easily locate relevant information and experts on an enterprise-wide basis across departmental and geographic boundaries, as well as across externally-facing customer and partner communities.
The Company's platform is capable of supporting deployments, including those with complex environments ! with tens of thousands of employees internally and millions of users externally. The Company provides tools to help its customers manage the critical elements of application security, including authentication, authorization and regulatory compliance. The Company enables customers to identify the impact of its platform on a particular business outcome. This includes identifying relevant user metrics, success rates and positive trends across the business. The Company's platform integrates with legacy IT infrastructure and a broad range of existing enterprise applications, including email, content management, customer relationship management, marketing automation, product development, eCommerce and instant messaging and enables access from mobile devices, browsers, desktop applications, collaboration applications and consumer social platforms.
The Company enables customers and third parties to develops applications that leverage its platform through its Jive Apps Market, built on the industry standard OpenSocial specifications. Users can easily find, purchase and install applications tailored to meet specific business needs in a variety of industries and business functions, enabling further innovation and functionality on the Company's platform. Developers can leverage the enterprise social graph to make applications more social and broaden their reach. The Company's platform has been developed to facilitate easy deployment with familiar interfaces. The Company offers its customers the ability to configure its solutions to deliver the specific functionality and user experience they want for their end-users, and the ability to modify the look and feel of its solutions to conform to their branding or other requirements. The Company's customers can use the Company's platform on demand through the public cloud, or via a private cloud. This flexible delivery model allows the Company to meet a variety of security and cost requirements and better address the needs of each customer, and enables the Co! mpany to ! target a wider range of potential customers.
The Company's flagship product, the Jive Platform, offers social business capabilities that enable employee, customer and partner engagement on a unified platform. The core platform can be expanded by adding optional modules, including Jive Present, Gamification, Ideation, Mobile, Video, and connectors into existing enterprise systems and applications. The Company's platform can also be extended to include cloud and customer-built applications through the Jive Apps Market. All of this activity and content is aggregated and presented to users via the Jive What Matters layer.
The Jive Platform serves two types of communities: Employees and Customers and partners. The Company's platform connects users across the enterprise and its functional departments, leveraging social intelligence, such as business relationships and areas of interest, to proactively provide relevant documents, discussions and other content to users. The Company's platform enables the Company's customers to build and manage external communities to build their brand, increase interaction and feedback, and reduce their support costs through enhanced online communication with their own customers and business partners.
The Jive Platform enables rich social profiles, visual enterprise directories, connections and identification. Users can easily find, follow and access both people and data through structured spaces, including public and private social groups and projects. This provides users with up to the minute access to relevant and critical information. The Company's platform enables blogging, microblogging, discussions, real time chat and video conversations and direct messaging and aggregates these familiar methods of social communications into a social inbox to allow users to find relevant information quickly and easily.
The Company's platform includes wikis, document sharing, an easy-to-use rich text editor, and full-fidelity rendering of Micros! oft Offic! e documents and PDFs with inline commenting, allowing users to collaborate real-time. The Company's platform enhances collaboration by allowing users to control access to content at the individual, group or document level. The Company's platform includes advanced search capabilities to locate relevant people, content and groups using information captured in the enterprise social graph, such as users' skills or profile information. The Company's platform can integrate with numerous enterprise systems such as customer relationship management, enterprise resource planning, software configuration management, or product lifecycle management systems, via the Company's application programming interfaces, or APIs.
Advisors' Opinion:- [By Lee Jackson]
The Lazard trading desk said that active traders may want to look at software stocks that still had unusually high short interest. Those included Concur Technologies (NASDAQ: CNQR), Tangoe Inc. (NASDAQ: TNGO), Jive Software (NASDAQ: JIVE), Marketo Inc. (NASDAQ: MKTO), VeriSign Inc. (NASDAQ: VRSN) and VMware Inc. (NYSE: VMW). Stocks with high short interest can explode to the upside if the company gets back on track and short sellers are forced to cover.
- [By Roberto Pedone]
Another stock that looks poised to trigger a near-term breakout trade is Jive Software (JIVE), which provides a social business software platform. It provides the Jive Engage platform for its customers for business. This stock has been under selling pressure over the last six months, with shares off by 14%.
If you take a look at the chart for Jive Software, you'll notice that this stock recently gapped down sharply from over $17 a share to under $13.50 a share with heavy downside volume. Following that move, shares of JIVE went on to tag its recent low of $12.74 a share. That move has now pushed shares of JIVE into oversold territory, since its current relative strength index reading is 19.23. Oversold can always get more oversold, but it's also an area from which a stock can experience a powerful bounce higher. Shares of JIVE are now starting to trend back up and move within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in JIVE if it manages to break out above Friday's intraday high of $13.87 a share and then once it clears its gap down day high of $14.13 a share high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 812,638 shares. If that breakout triggers soon, then JIVE will set up to re-fill some of its previous gap down zone that started just above $17 a share.
Traders can look to buy JIVE off any weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $12.74 a share. One could also buy JIVE off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
The short-sellers love this stock, since the current short interest as a percentage of the float for JIVE is very high at 17.6%. This stock could easily experience a sharp short-covering rally if it gets into that gap
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