James Cole, BA, CFA
PMI Group Inc
PMI-N
PAST TOP PICK
Jul 06, 2005
(A Top Pick Feb 18/05. Down a fraction.) Engaged in the private mortgage insurance. Still likes. Should give a very good rate of return over the long term.
(A Top Pick Oct 18/04. Up 5%.) Insure "higher loan to value" mortgages in the US. Also in the financial guarantee business. Because of wide spread concerns of a housing bubble in the US, mortgage insurers have fallen to trading at 9 X earnings and 1 X this year's tangible Book. Feels concerns are overblown and the prices offer very little downside and very good upside in the long term.
They are in private mortgage insurance. Has lagged its group for no particular reason. Trades around 9 X earnings, not much over tangible book value. Great company. Strong financial position.