A Look at Radian Group Inc. (RDN) Shares in the Recent Past Indicates Growth

Radian Group Inc. (NYSE: RDN) stock fell -0.18% on Friday to $22.31 against a previous-day closing price of $22.35. With 2.78 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.64 million shares. During the session, the Insurance – Specialty company that operates in wider Financial sector, reached to the highest price of $22.60 whereas the lowest price it dropped to was $22.17. The 52-week range on RDN shows that it touched its highest point at $24.84 and its lowest point at $17.97 during that stretch. It currently has a 1-year price target of $27.31. With its current market cap of 3.78 billion, RDN has annualized dividend of $0.80 while the current yield stands at 3.59%. Beta for the stock currently stands at 1.22.

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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 RDN was up-trending over the past week, with a rise of 0.68%, but this was up by 10.39% over a month. Three-month performance dropped to -0.71% while six-month performance fell -0.22%. The stock gained 1.64% in the past year, while it has gained 5.58% so far this year. A look at the trailing 12-month EPS for RDN yields 3.54 with Next year EPS estimates of 3.19. For the next quarter, that number is 0.76. This implies an EPS growth rate of 57.70% for this year and -8.00% for next year. EPS is expected to grow by 23.90% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 18.60%.

Float and Shares Shorts:

At present, 176.82 million RDN shares are outstanding with a float of 171.41 million shares on hand for trading. On Jul 14, 2022, short shares totaled 6.75 million, which was 3.91% higher than short shares on Jun 14, 2022. In addition to Mr. Richard Gerald Thornberry as the firm’s CEO & Director, Mr. J. Franklin Hall serves as its Sr. EVP & CFO.

Institutional Ownership:

Through their ownership of 106.69% of RDN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.24% of RDN, in contrast to 45.00% held by mutual funds. Shares owned by individuals account for 1.81%. As the largest shareholder in RDN with 10.43% of the stake, The Vanguard Group, Inc. holds 18,018,442 shares worth 18,018,442. A second-largest stockholder of RDN, Fidelity Management & Research Co, holds 13,851,303 shares, controlling over 8.02% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in RDN, holding 12,116,829 shares or 7.01% stake. With a 2.95% stake in RDN, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 5,091,854 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.53% of RDN stock, is the second-largest Mutual Fund holder. It holds 4,367,659 shares valued at 85.82 million. iShares Russell 2000 ETF holds 2.25% of the stake in RDN, owning 3,891,782 shares worth 76.47 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. It generated $181.13M net income for the quarter, which came to $656.19M over the last twelve months.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RDN since 9 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With RDN analysts setting a high price target of $35.00 and a low target of $22.50, the average target price over the next 12 months is $27.31. Based on these targets, RDN could surge 56.88% to reach the target high and rise by 0.85% to reach the target low. Reaching the average price target will result in a growth of 22.41% 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. RDN will report FY 2022 earnings on 02/09/2023. Analysts have provided yearly estimates in a range of $4.25 being high and $2.99 being low. For RDN, this leads to a yearly average estimate of $3.86. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Radian Group Inc. surprised analysts by $0.58 when it reported $1.36 EPS against a consensus estimate of $0.78. The surprise factor in the prior quarter was $0.41. Based on analyst estimates, the high estimate for the next quarter is $0.85 and the low estimate is $0.59. The average estimate for the next quarter is thus $0.76.

Summary of Insider Activity:

Insiders traded RDN stock several times over the past three months with 42 Buys and 26 Sells. In these transactions, 729,766 shares were bought while 327,464 shares were sold. The number of buy transactions has increased to 45 while that of sell transactions has risen to 31 over the past year. The total number of shares bought during that period was 811,716 while 588,751 shares were sold.

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