Phone/Text:
(954) 800-0460
LATEST RESEARCH REPORT
NMI Holdings (NMIH)
NMI Holdings (NMIH) is a mortgage insurance company. While that seems like a rather unexciting line of business, the company’s stock is anything but boring.
NMIH is somewhat unusual in that it is both a growth stock and value stock. The company has improved its earnings for every year for the last 10 years. Few companies can make that claim. For perspective, almost all the big glamour stocks (Microsoft, Apple, NVIDIA, Amazon, Meta and Tesla) have had a couple of declining earnings years over the same time period. Alphabet (GOOG) has had one.
It is not easy to improve earnings 10 years in a row. Most companies that experience stellar growth have a low earnings yield (trailing 12 months earnings per share / stock price) because investors are willing to pay up for that stable growth. When the price of the stock goes up, its earnings yield goes down.
But that is not the case here. Perhaps this is due to NMI Holdings “old school” line of business. NMIH’s earnings yield is currently an attractive 12.45%. A high earnings yield like that is usually a sign that investors are expecting a decline in earnings. But that does not appear to be the case anytime soon. Analysts are still expecting earnings growth to continue for at least another couple of years. Perhaps it is just a situation of investors having a myopic focus on tech and not being too interested in anything else.
But the stock can move. NMIH had a 700% move during 2016-2020 and a separate 177% move during 2020-2022. NMIH is currently up 99% from its 2022 low which is more than Alphabet (+81%), Tesla (+58%) and Apple (+34%).
In summary, buying NMIH provides diversification from tech yet also offers the tantalizing possibility of tech-like outsized returns.
Action:
Partial SELL BILS (22.1% of the current BILS position).
This will result in changing the BILS allocation in the Intrinsic Value Equity Model from 32.4% to 25.24%.
BUY NMIH. The dollar amount should be 6.66% worth of the Intrinsic Value Equity Model. This will result in the Intrinsic Value Equity Model changing its NMIH allocation from 0% to 6.66%.
Call/Text: (954) 800-0460
invest@neiljesaniwealth.com
HEADQUARTER: 1300 Sawgrass Corporate Parkway, Suite 130, Sunrise, FL 33323, USA
REPRESENTATIVE OFFICE: 1406 Exchange Tower, Business Bay, Dubai, UAE
DISCLAIMER: Neil Jesani Wealth Management LLC is a State Registered Investment Advisory firm. The purpose of this website is to provide general information on the subjects discussed, it is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Neil Jesani Wealth Management LLC is an entity separate than that of Neil Jesani Advisors Inc. Investing involves risk, including the potential loss of principal. Neil Jesani Wealth Management's registered financial advisor representatives are authorized only to conduct business with residents of the states and/or jurisdictions in which they are registered. Here is the link to our ADV.
Copyright @ 2024 Neil Jesani Wealth Management, LLC. All rights reserved.