Who would have thought that a financial services company would do well in 2013 – especially on the heels of all the financial woes that the world – especially the U.S. – has seen.
RDN provides credit-related insurance coverage and financial services to mortgage lenders and other financial institutions through its network of subsidiaries and affiliates. And it makes our list of top performing stocks because its stock has risen nearly 182% over the review period.
A significant portion of the credit for RDN's 2013 success lies in the fact that the company had outshone its peers in writing new mortgages during 2012.
This, and the fact that company management made a strategic decision to continue to invest unused capital from its Financial guaranty business into Mortgage Insurance, are key drivers for RDN's 2013 meteoric rise.
Besides, Mortgage insurance has traditionally been one with significantly steep barriers to entry, and RDN seems to thrive on that competitive advantage.
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If you are still on the platform undecided whether to buy or hold Radian stock (RDN), you may wish to stand your ground for a little while longer.
RDN's portfolio of mortgages includes a significantly higher (than its competitors) percentage of borrowers with poor credit. Before deciding to buy Radian stock, one may wish to sit on the sideline to see what impact rising interest rates do to credit defaults of RDN clients.
Additionally, the company leads the industry in single-premium mortgages, which is a lower-margin and less profitable line of business than mortgages with standard monthly premium payments.
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