Is Radian Group Inc. (RDN) positioned for future growth?

Radian Group Inc. (NYSE: RDN) stock fell -0.69% on Thursday to $25.72 against a previous-day closing price of $25.90. With 1.2 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.05 million shares. The 52-week range on RDN shows that it touched its highest point at $28.26 and its lowest point at $17.83 during that stretch. It currently has a 1-year price target of $29.17. With its current market cap of 4.05 billion, RDN has annualized dividend of $0.90 while the current yield stands at 3.50%. Beta for the stock currently stands at 1.09.

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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 down-trending over the past week, with a drop of -3.38%, but this was down by -5.51% over a month. Three-month performance surged to 2.59% while six-month performance rose 23.42%. The stock gained 22.89% in the past year, while it has gained 34.87% so far this year. A look at the trailing 12-month EPS for RDN yields 4.09 with Next year EPS estimates of 3.30. For the next quarter, that number is 0.81. This implies an EPS growth rate of 37.90% for this year and -5.39% for next year. EPS is expected to grow by 2.06% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 33.80%.

Float and Shares Shorts:

At present, 159.01 million RDN shares are outstanding with a float of 156.18 million shares on hand for trading. On Aug 14, 2023, short shares totaled 6.59 million, which was 4.19% higher than short shares on Jul 13, 2023. In addition to Mr. Richard Gerald Thornberry as the firm’s CEO & Director, Mr. Robert James Quigley serves as its Exec. VP, Corp. Controller & Chief Accounting Officer.

Institutional Ownership:

Through their ownership of 107.98% of RDN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 61.44% of RDN, in contrast to 38.20% held by mutual funds. Shares owned by individuals account for 2.08%. As the largest shareholder in RDN with 14.03% of the stake, The Vanguard Group, Inc. holds 21,936,436 shares worth 21,936,436. A second-largest stockholder of RDN, BlackRock Fund Advisors, holds 13,127,709 shares, controlling over 8.40% of the firm’s shares. JPMorgan Securities LLC is the third largest shareholder in RDN, holding 9,517,550 shares or 6.09% stake. With a 3.13% stake in RDN, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 4,889,102 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.59% of RDN stock, is the second-largest Mutual Fund holder. It holds 4,054,913 shares valued at 109.2 million. T Rowe Price Small Cap Value Fund holds 2.42% of the stake in RDN, owning 3,776,176 shares worth 101.69 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for RDN since 0 analysts follow the stock currently. 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 $26.00, the average target price over the next 12 months is $29.17. Based on these targets, RDN could surge 36.08% to reach the target high and rise by 1.09% to reach the target low. Reaching the average price target will result in a growth of 13.41% 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.

Summary of Insider Activity:

Insiders traded RDN stock several times over the past three months with 0 Buys and 1 Sells. In these transactions, 0 shares were bought while 3,800 shares were sold. The number of buy transactions has increased to 43 while that of sell transactions has risen to 36 over the past year. The total number of shares bought during that period was 639,474 while 498,669 shares were sold.

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