“Everyone paints the [mortgage insurance companies] with a broad brush that since they took PMI … they’re all going to go the way of the dodo,” said Mr. Bass, at a housing-industry conference.Shares of MTG have plummeted in 2011 from $12 to less than $3 per share. Mr. Bass purchased the shares for $2.50 on Oct. 31, 2011.
Insiders have purchased a boatload of stock starting in April 2011. Insiders have accumulated hundreds of thousands of shares at prices ranging from $1.89-$7.70. The most recent insider buy was on Aug. 26, 2011 at $2.34.
Kyle Bass thinks that MGIC is different than PMI because MGIC has a "pretty big positive equity position.” However, traders should note that Bass appears to be making a long-term bet on MGIC. He said, “We think they’ll be one of … the last ones standing; we’re in it for the long haul.”
Investors looking to ride Mr. Bass' coattails should note that he made a similar investment in Seahawk Drilling that was unsuccessful. Seahawk (HAWK) was negatively impacted by the BP oil spill and Bass scooped up shares at $4. The shares are currently on the Pink Sheets and trade for $1.28.