Tomahawk, WI 8/20/2013 (Basicsmedia) – One of the biggest mortgage insurers in the U.S, which is a privately run company, is MGIC Investment Corp. (NYSE:MTG). It has a number of subsidiaries which it wholly owns and they have operations in every state in the U.S. It is worth mentioning that this is also a holding company. However, it has been struggling quite a lot of late and this is what we will look at in this article. It is strange to come across a holding company, which provides mortgage insurance, to be struggling in the way which MTG has been. Let’s look at the reasons for this.


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Why Is MTG Struggling?

MTG services are provided to homeowners in the U.S as well as Puerto Rico. With such a large market for its goods, it is inconceivable that it could be struggling to an extent where it has reported 1.7% stagnation in its loan financial records. But this is not the only area in which the company has reported results which aren’t as pleasant as what it hoped for. Fortunately, several reasons have been cited as being responsible for the situation which MTG currently finds itself in. These reasons are indicated in the following paragraphs.

MTG struggles because the unemployment rate in the U.S is quite high. If the unemployment rate is high, then it follows that its services won’t be requested by many of its customers. The cure rates are quite short as well and this has played some part in reducing MTG stock, thus eating into a bit of the confidence which investors had on it in the first place. Perhaps, one of the main reasons why MTG has been struggling of late is because investors are starting to grow apprehensive about its future, bearing in mind its failure to report profits in the last six years.

Recently, in the first two weeks of August 2013, the company reported a 2.8% drop in its stock price. In the last one year, the company has suffered a low of $1.10 in its stock price, and a high of $8.16. As these figures indicate, the company has been unable to pass the $10 mark in the last one year, or within a 52-week trading period. The trading volume which the company reports on average, is around 8.86 million. But, there is always hope that the company could turn the whole situation around based on its market capitalization which currently stands at $2.46 billion.

What Should Investors Do with their MTG Stock?

This is the type of stock which I recommend investors to hold, and neither sell nor buy. Its market cap is one of the factors which could work inn its favor if it can put its house in order. I expect this stock to perform better in the market, since the products the company sells are necessary. If the industry picks up, the benefits will be felt by MTG and other companies which provide similar products. The economy is expected to improve, and when this happens, MTG will reap the benefits which will see the stock rising higher than it has in the last 52-week period.

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