ESNT closed at 42.51 today, reaching an all-time high since going public - up about 8% over the last week on higher than normal volume. Even at this price it still sports a very reasonable YPEG of only 0.37. Glad I didn’t sell just after the hurricanes wrecked havoc earlier this fall. It will be interesting to see how they report 3rd quarter numbers in a few week’s time.
Happy investing,
DT
Glad I didn’t sell just after the hurricanes wrecked havoc earlier this fall. It will be interesting to see how they report 3rd quarter numbers in a few week’s time. - DT
And I’m chagrined I did. Frankly, I was completely flummoxed when the property & casualty insurance sector rose, as a whole, after three hurricanes and a slew of wildfires. Doesn’t make sense to me. I, too, will be paying attention to the 3Q earnings reports. Is the prospect of fed funds rate increases THAT potent?
Hi putnid,
But keep in mind that ESNT is not a property or casualty insurer - they insure mortgages. Their ties to natural disasters are limited, and they are in fact insulated from that type of loss. The greater danger comes from financial disruption (ala 2008) and the accompanying mortgage defaults. I think ESNT’s prospects going forward are also very dependent on the growing housing industry. When new houses are built, new mortgages are required, and those mortgages need to be insured. I’m not sure how significant the disruption to housing in the hurricane/fire regions will be. In the short term the number of mortgage insurance policies may go down, but as homes are rebuilt, the number of policies will go back up. As I said, this quarter should be interesting.
Regarding the run-up during the last week, I have a feeling that one (or more) of the big players (e.g. funds) are easing into larger positions. Volume is up, and someone is buying those shares to drive the price increase. I’m enjoying the ride:-)
DT
And I’m chagrined I did. Frankly, I was completely flummoxed when the property & casualty insurance sector rose, as a whole, after three hurricanes and a slew of wildfires. Doesn’t make sense to me
The answer is that P&C insurers now get to raise rates. Happens all the time.
Essent should be dependent upon increased house consumption, which appears to be happening.
ESNT closed at 42.51 today, reaching an all-time high since going public - up about 8% over the last week on higher than normal volume. Even at this price it still sports a very reasonable YPEG of only 0.37. Glad I didn’t sell just after the hurricanes wrecked havoc earlier this fall. It will be interesting to see how they report 3rd quarter numbers in a few week’s time
Very Strong Growth Stock, and #1 it is group
Rating
Composite Rating 99
EPS Rating 98
RS Rating 88
Group RS Rating A+
SMR Rating A
Acc/Dis Rating A
I had this on my IBD alerts list because of the strength and the fact it was in a good base.
http://stockcharts.com/freecharts/gallery.html?esnt
By IBD/CANSLIM dogma, the proper buy point was $41.54 if there was strong volume as it passed that point. you can see on the chart that was clearly the case on 10/16 and that’s when my alerts fired and cause me to buy. IBD dogma also says not to buy above the 5% range from the buy point. It is now 7.08% above the buy point, so the theory is that is it too risky to buy now.
But that is all based on IBD/CANSLIM “rules”. They are about short to medium term speculating and require you to sell with a 7-8% loss to preserve your captial for another day. It is very differnt from Saul’s approach, yet many of the the stocks are in common.
A good article
http://www.investors.com/stock-lists/sector-leaders/can-sect…
Private-mortgage insurer Essent Group (ESNT) acted bullishly on Monday, padding its gains after breaking out of a new nine-week second-stage flat base with a 41.54 buy point on Friday.
On Monday, shares rose as much as 2.3%. At the session’s high of 42.64, Essent remained within proper buy range; the buy zone goes up to 43.62, 5% above the 41.54 correct entry.
In a superb flat base, you want to see volume quiet down as the stock moves sideways, never falling more than 15% from its 52-week high. Essent fits the bill in both measures.
…
Earnings per share have risen 52%, 45%, 37%, 39%, 48%, 42%, 38% and 35% vs. year-ago levels in the past eight quarters. Revenue at the Bermuda-based firm has grown 25% to 42% over the same time frame. It’s natural, then, to expect a slowdown in growth, and Q3 profit is seen rising just 18% to 77 cents a share.
The annual EPS estimates still remain good: up 26% to $3.04 a share in 2017 and up 18% to $3.58 in 2018.
On Aug. 8, Essent priced 5 million common shares at 39.90 each. That offering helped explain the huge increase in turnover during the week ended Aug. 11. At the end of the second quarter on June 30, the company recorded 93.2 million diluted shares outstanding.
Insurance in force as of June 30 was $95.5 billion, up 32% vs. a year ago. Meanwhile, management has shown strong discipline in controlling expenses. The loss ratio was 1.4% vs. 2.9% in Q2 2016, while the expense ratio fell to 28.2% from 31.2%.
All good stuff puddinhead. I don’t trade on technical indicators, so not sure about the proper buy and sell indicators. I tend to go with longer term trends over several quateres. As noted in the referenced article, the only blemish on ESNT seems to be that the rate of growth is slowing. But with the 1YPEG still below .40, things still look pretty good to me. We shall see what happens when they report.
DT