Despite the volatility in the stock market, there are signs that the economy is getting stronger. As that happens, the housing market, which was at the root of our recent economic crisis, should also improve. Hilary Kramer, editor of GameChangerStocks.com, says that this trend offers investors upside potential in an area that tends to be under the radar: private mortgage insurance.
Private mortgage insurers, which insure lenders against defaults by borrowers, were hard hit by the collapse of the residential property market. But
Kramer says that two companies in particular in the sector, PMI Group (PMI) and Radian Group (RDN), are now at the point where they can start writing more business. (See video below.)
Recently, Kramer says, both companies have done secondary offerings, cleaned up their balance sheets and now have permission from regulators to practice in all 50 states. In short, they have turned their financial structures around.
Among her other picks: homebuilders, such as Hovanian (HOV).
While Wall Street still isn't showing any love to these companies just yet, Kramer says that the tide is turning and that as the economy continues to recover, increased financial stability will help these lenders to compete and win more business.
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