Taking on analysts’ expectations and winning: NMI Holdings Inc. (NMIH)

NMI Holdings Inc. (NASDAQ: NMIH) stock jumped 8.52% on Friday to $20.39 against a previous-day closing price of $18.79. With 1.29 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.61 million shares. During the session, the Insurance – Property & Casualty company that operates in wider Financial sector, reached to the highest price of $20.66 whereas the lowest price it dropped to was $19.18. The 52-week range on NMIH shows that it touched its highest point at $27.25 and its lowest point at $15.33 during that stretch. It currently has a 1-year price target of $28.88. Beta for the stock currently stands at 1.51.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of NMIH was up-trending over the past week, with a rise of 9.56%, but this was up by 21.22% over a month. Three-month performance surged to 6.59% while six-month performance fell -20.91%. The stock lost -6.89% in the past year, while it has lost -6.68% so far this year. A look at the trailing 12-month EPS for NMIH yields 2.83 with Next year EPS estimates of 3.65. For the next quarter, that number is 0.76. This implies an EPS growth rate of 22.90% for this year and 15.98% for next year. EPS is expected to grow by 23.20% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 20.40%.

Float and Shares Shorts:

At present, 85.95 million NMIH shares are outstanding with a float of 85.09 million shares on hand for trading. On Jul 14, 2022, short shares totaled 1.28 million, which was 1.48% higher than short shares on Jun 14, 2022. In addition to Mr. Bradley Mize Shuster as the firm’s Exec. Chairman, Mr. Adam S. Pollitzer serves as its Pres, CEO & Director.

Institutional Ownership:

Through their ownership of 100.04% of NMIH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 54.33% of NMIH, in contrast to 44.80% held by mutual funds. Shares owned by individuals account for 15.78%. As the largest shareholder in NMIH with 14.85% of the stake, BlackRock Fund Advisors holds 12,780,740 shares worth 12,780,740. A second-largest stockholder of NMIH, The Vanguard Group, Inc., holds 5,683,930 shares, controlling over 6.60% of the firm’s shares. Oaktree Capital Management LP is the third largest shareholder in NMIH, holding 5,320,000 shares or 6.18% stake. With a 7.05% stake in NMIH, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 6,069,951 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.95% of NMIH stock, is the second-largest Mutual Fund holder. It holds 2,539,280 shares valued at 42.28 million. PRIMECAP Odyssey Aggressive Growt holds 2.60% of the stake in NMIH, owning 2,240,929 shares worth 37.31 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for NMIH since 9 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 1 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With NMIH analysts setting a high price target of $42.00 and a low target of $20.00, the average target price over the next 12 months is $28.56. Based on these targets, NMIH could surge 105.98% to reach the target high and fall by -1.91% to reach the target low. Reaching the average price target will result in a growth of 40.07% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. NMIH will report FY 2022 earnings on 02/14/2023. Analysts have provided yearly estimates in a range of $3.25 being high and $2.90 being low. For NMIH, this leads to a yearly average estimate of $3.15. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. NMI Holdings Inc. surprised analysts by $0.10 when it reported $0.86 EPS against a consensus estimate of $0.76. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $0.83 and the low estimate is $0.69. The average estimate for the next quarter is thus $0.79.

Summary of Insider Activity:

Insiders traded NMIH stock several times over the past three months with 13 Buys and 3 Sells. In these transactions, 90,220 shares were bought while 21,262 shares were sold. The number of buy transactions has increased to 23 while that of sell transactions has risen to 32 over the past year. The total number of shares bought during that period was 410,896 while 173,449 shares were sold.

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