These were among the earliest and most severely injured casualties of the mortgage crisis and frankly I had ignored them for a long time. However, I noticed that in the past year that they have really begun to rally in a huge way. MBIA (MBI) and MGIC (MTG) have been coming back the quickest with Ambac (ABK) and PMI (PMI) lagging somewhat. Ambac is the worst among them as it has shown no real signs of recovery while PMI has had an incredible percentage move, but is still off more in proportion to the high compared to MGIC and MBIA.
How much upside is still left in them? I will confess to not really understanding the businesses well enough to get a good sense of whether or not the analyst estimates for earnings are sensible. Still, MGIC, MBI, and PMI are worth looking at even after their large recoveries. In assessing whether or not their valuations make sense, how their businesses have changed compared to 2006 is absolutely vital to understand. I will confess to not knowing a great deal on how these changes have transpired.
If anyone else has any insights, I would be curious.