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Housing Prices Rise, New Home Sales Fall, Earnings Loom

Seeking Alpha

April 24, 2014
By David Sims

Shareholders have been speaking out recently, due to the fact that Fannie and Freddie have now created a solid profit for taxpayers. They believe it is time for the Rule of Law to be restored and shareholders to begin participating as business partners in these entities operations.

Meanwhile some weakness appears to be showing in other housing data. Existing home sales came in slightly lower than expected on Tuesday at 4.59 million units, but new home sales were well below expectations dropping to 384,000 versus expectations of 455,000 in reports released Wednesday.

Mortgage insurers like MGIC Investment Corp. (MTG) and Radian Group Inc. (RDN) should perform well with continued increases in home prices. Based on expected future results, both companies trade at very decent earnings multiples of about ten and eleven times forward earnings. Radian is expected to report 1st Quarter earnings soon.

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