Radian Group, Inc., through its wholly owned subsidiaries, Radian Guaranty Inc. and Amerin Guaranty Corporation, provides private mortgage insurance coverage in the United States on residential mortgage loans. For the FY ended 12/31/00, total revenues increased 11% to $615.4M. Net income applic. to Common rose 70% to $245.6M. Results reflect strong new insurance volume, a reduced provision for losses and the absence of merger expenses.

March 18, 2001

The Radian Group (RDN) provides private mortgage insurance and risk management services to residential mortgage lenders, commercial banks and savings institutions. The company’s niche market in private mortgage insurance protects lenders from default on home buyers who make down payments of less than 20% of a home's purchase price. Focusing on this niche market has paid off tremendously for the company. RDN grew annual EPS by a staggering 68% last year. Wall Street has also taken notice of the company’s performance, as all nine firms covering RDN presently hold a “Buy” rating on shares. Currently, RDN has 80.0 million shares authorized and 46.25 million shares issued, with the last recorded split having taken place on December 2nd, 1996 at $76. Although the BoD will need to authorize more shares before a 2:1 stock split can take place, we certainly feel this is a possibility. As for the stock, we feel RDN may be forming a bottom. The technical indicators certainly suggest this, with both the MACD and stochastic on the verge of bullish crossovers. In addition, the $60 level has held as support a staggering eight times over just the past month and a half. With that said, should shares trend higher in the upcoming week, we’ll look for resistance to occur at the 50-dma of $61.78, followed by a stiffer challenge at $65. Support will come at the $60 mark. Look to time entries when RDN shares bounce off support or break above the 50-dma on volume of at least 225,000 shares traded by midday. We’ll set our initial stop at $59, to limit our downside risk.

Picked on March 18th @ $61.00
Change since picked 0.00
Stop Loss @ $59.00

April 8, 2001

Our aggressive, raised stop helped to lock in profits towards the upper end of RDN’s trading range. Given the current market environment, we felt that a fairly tight stop was necessary for protection against any possible swings to the downside. This turned out to be the case on Friday, as a major bankruptcy filing from a California utility company caused RDN to clip our stop at $65.25.

Picked on March 18th @ $61.00
Profit/Loss = +4.25 (+7%) (Stopped out Friday @ $65.25)
Best Profit = +7.98 (+13%)