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Fiserv on pace for growth in 2011; Insiders are buying MGIC stock

Fiserv on pace for growth in 2011

Brookfield-based Fiserv Inc. reported first quarter net income of $112 million, which was down from $121 million a year earlier.

However, the company’s quarterly adjusted earnings per share grew to $1.02 from 95 cents a year earlier, and total revenue grew to $1.05 billion from $1.01 billion.

Fiserv completed three acquisitions in the quarter: Credit Union On-Line Inc.; Maverick Network Solutions Inc.; and Mobile Commerce Ltd.

The company repurchased 4.3 million shares of common stock in the quarter for $261 million. As of March 31, 2011, the company had approximately 1.8 million shares remaining under its share repurchase authorization.

"Our first quarter revenue growth is kicking off a good start to the year led by strong performance in our Payments segment," said Jeffery Yabuki, president and chief executive officer of Fiserv. "We are enhancing our sustainable revenue growth profile through a strong business model, market leading technologies and solid sales execution."

Fiserv continues to expect 2011 adjusted internal revenue growth to be in a range of 2 to 4 percent. The company also expects 2011 adjusted earnings per share to be in a range of $4.42 to $4.54, which represents growth of 9 to 12 percent compared with $4.05 in 2010.

"Given our results in the quarter and visibility into the remainder of the year, we are on-track to achieve our 2011 guidance," Yabuki said.

Insiders are buying MGIC stock

Several of the top executives of MGIC Investment Corp. are showing confidence in the future of the troubled Milwaukee company by increasing their holdings of the firm’s common stock.

InsiderTrader.net reported the following transactions.

Chairman and chief executive officer Curt Culver acquired 80,000 shares, paying $7.76 per share for a total amount of $620,552.. Culver increased his stake by 7.05 percent to 1,214,359 shares.

President and chief operating officer Patrick Sinks acquired 25,000 shares, paying $7.70 per share for a total amount of $192,500. Sinks increased his stake by 4.14 percent to 628,484 shares.

Executive vice president and chief financial officer Jon Michael Lauer acquired 20,000 shares, paying $7.70 per share for a total amount of $153,998.. Lauer increased his stake by 3.82 percent to 543,821 shares.

MGIC’s stock dropped from a high of $9.50 to around 8.07 last week. The stock fell more than 11 percent last Wednesday after the company reported a wider than expected loss for its fiscal first quarter. The stock however regained most of that lost ground with a gain of more than 8 percent on the following day, with part of that gain triggered by the insider purchases. The stock was trading at more than $8.30 on Monday.

According to SeekingAlpha analyst Asif Suria, multiple insider purchases after an earnings related drop in stock price are often foretelling of a rebound.

“However I am less enthused about MGIC as the company has posted losses in 14 out of the last 15 quarters and has also indicated that it might see insurance claim costs increase in the future. On the positive side if the government reduces the role of the Federal Housing Administration (FHA) in providing affordable down payments to first time buyers, mortgage insurers like MGIC, Radian Group and California based PMI Group could see their market share expand,” Suria wrote.

 

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