Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Genworth Advances in Wager on U.S. Housing-Market Rebound

March 11 (Bloomberg) -- Genworth Financial Inc., the provider of life insurance and mortgage guaranties, posted the largest gain in the Standard & Poor’s 500 Index on speculation the company will benefit from the rebound of the housing market.

Genworth rose 6.7 percent to $10.50 at 4 p.m. in New York trading. The Richmond, Virginia-based company has advanced 40 percent this year. Scotia Capital upgraded the company two levels to sector outperform, the second-highest of the bank’s four ratings. Barron’s said March 9 the insurer will reward investors.

New-home sales rose to an annual pace of 437,000 in January, the highest rate since July 2008, according to Commerce Department data last month. U.S. home prices probably will rise 8 percent this year, up from a previous estimate of a 4.7 percent increase, according to Bank of America Corp. Mortgage insurers cover lenders’ losses when homeowners default and foreclosures fail to recoup costs.

“The resurgent U.S. mortgage market offers Genworth its best chance to grow,” Barron’s said. “Investors think the shares, which still sell for less than half of book value, could be worth as much as $18 or more.”

Mortgage insurers have surged this year on bets the companies can increase sales as the government works to limit its role in the housing market. MGIC Investment Corp., based in Milwaukee, climbed 4.5 percent, extending its gain since Dec. 31 to 93 percent. Radian Group Inc., which also sells mortgage insurance, jumped 5.9 percent and is up 65 percent this year.

Joanne Smith, an analyst at Scotia Capital, cited Genworth’s “strong leverage to an improving housing market.” She raised her 12-month price target to $12 a share from $9.50, in a note to investors today.

To contact the reporter on this story: Elizabeth Bunn in New York at ebunn1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.