Rebounding MGIC leads local stock surge

The top-performing stocks of publicly traded companies based in southeastern Wisconsin in the first half of the year reflects a diverse collection of industries.

The list of the top 10 local stocks in the BizTimes Stock Index includes manufacturers, financial service providers, a grocer, a communications provider, a health care technology company, a transit firm and a staffing company.

The top 10 local stocks for the first half of the year are: MGIC Investment Corp.; Roundy’s Inc.; MagneTek Inc.; Roadrunner Transportation Systems Inc.; Journal Communications Inc.; Merge Technologies Inc.; Bank Mutual Corp.; Strattec Security Corp.; Modine Manufacturing Inc. and ManpowerGroup.

Perhaps the most interesting stock on the list is that of MGIC Investment Corp. After years of multi-billion dollar losses, MGIC’s return to the top of the list is reflective of the rebound in the nation’s housing market.

MGIC is the largest insurer of Fannie Mae and Freddie Mac programs, which were decimated by the Great Recession

MGIC’s stock price, trading on the New York Stock Exchange with the MTG ticker symbol, increased 121.8 percent from $2.66 at the beginning of the year to $5.90 at the mid-year point.

Granted, the company was starting at the bottom. MGIC has not posted an annual profit since 2006.

However, the Milwaukee-based company could be poised to make a comeback as the housing market heals, according to a recent report by Standard & Poor’s analyst Ron Joas.

“A sector some had written off seems to be making a comeback,” Joas wrote. “Mortgage insurers seem poised to return to profitability in 2014.”

Joas said a surge of capital into the mortgage-insurance sector amid a rebounding economy has eased concerns that insurers may become insolvent. Private guarantors wrote new policies on $175 billion in mortgages in 2012, more than double the year before, according to data from the newsletter Inside Mortgage Finance.

The U.S. Treasury Department said in a recent report that mortgage insurers, hobbled by the financial crisis, are beginning to see a turnaround.

“There are signs of increased capacity,” the Treasury’s Federal Insurance Office stated. “The industry has attracted new capital since 2010.”

In March, Standard & Poor’s upgraded MGIC’s rating from CCC+ to B- after the company offered 125 million shares of common equity at $5.15 each and jointly $450 million in senior convertible notes. Proceeds from the offerings were expected to be more than $1.2 billion.

At MGIC’s annual meeting, chief executive officer Curt Culver spoke about the “excellent position” the company is in.

“We believe that our strengthened financial condition puts us in a position to regain market share within our industry,” Culver told analysts.

BizTimes Stock Index – Research provided by Robert W. Baird & Co. Inc.

2013 Performance        
Stock Name Symbol 12/31/12 6/21/13 % Change
MGIC Investment Corp. MTG 2.66 5.9 121.8%
Roundy’s Inc. RNDY 4.45 7.52 69.0%
MagneTek Inc. MAG 10.56 17.48 65.5%
Roadrunner Transportation Systems Inc. RRTS 18.14 26.55 46.4%
Journal Communications Inc. JRN 5.41 7.57 39.9%
Merge Technologies, Inc. MRGE 2.47 3.43 38.9%
Bank Mutual Corp. BKMU 4.3 5.9 37.2%
Strattec Security Corp. STRT 25.81 34.82 34.9%
Modine Manufacturing Co. MOD 8.13 10.66 31.1%
Manpower, Inc. MAN 42.44 54.84 29.2%
Orion Energy Systems Inc. OESX 1.66 2.12 27.7%
Twin Disc, Inc. TWIN 17.43 22.18 27.3%
Johnson Outdoors, Inc. JOUT 19.92 24.58 23.4%
Waterstone Financial Inc. WSBF 7.8 9.59 22.9%
Assisted Living Concepts Inc. ALC 9.75 11.92 22.3%
Quad/Graphics Inc. QUAD 20.39 24.01 17.8%
Kohl’s Corp. KSS 42.98 50.59 17.7%
A.O. Smith Corp. AOS 31.535 36.59 16.0%
Johnson Controls, Inc. JCI 30.67 35.29 15.1%
Actuant Corp. ATU 27.91 31.83 14.0%
Sensient Technologies Corp. SXT 35.56 40.51 13.9%
Snap-on, Inc. SNA 78.99 88.07 11.5%
Fiserv, Inc. FISV 79.03 86.5 9.5%
Wisconsin Energy Corp. WEC 36.85 39.71 7.8%
Koss Corp. KOSS 4.75 5.04 6.1%
Weyco Group, Inc. WEYS 23.36 24.53 5.0%
Harley-Davidson, Inc. HOG 48.83 50.54 3.5%
Marcus Corp. MCS 12.47 12.83 2.9%
Generac Holdings Inc. GNRC 34.31 34.85 1.6%
Rockwell Automation, Inc. ROK 83.99 83.85 -0.2%
Badger Meter, Inc. BMI 47.41 44.93 -5.2%
Briggs & Stratton Corp. BGG 21.08 19.32 -8.3%
Brady Corp. BRC 33.4 30.42 -8.9%
Douglas Dynamics Inc. PLOW 14.39 12.9 -10.4%
Rexnord Corp. RXN 21.3 17.12 -19.6%
Joy Global, Inc. JOY 63.78 50.3 -21.1%
Zbb Energy Corp. ZBB 0.3298 0.245 -25.7%
Westbury Bancorp Inc.* WBB 13.59 13.66 0.5%
Artisan Partners Asset Management Inc.* APAM 35.2 54.73 55.5%
*WBB Started trading on 4/11/13 at 13.59        
*APAM Started trading on 3/7/13 at 35.20        
All data taken on 6/24/13 from Factset Research Systems      

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