MBIA, Inc. (NYSE:MBI)

CAPS Rating: 2 out of 5

The Company provides financial guarantee insurance and other forms of credit protection as well as investment management services to public finance and structured finance issuers and investors and capital market participants on a global basis.

MBI News and Commentary

Caps

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All Players

537 Outperform
433 Underperform
 

All-Star Players

94 Outperform
97 Underperform
 

Wall Street

4 Outperform
1 Underperform
 

Top MBI Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

Futurenhldad (< 20)
Submitted November 03, 2010

Their earnings are tied to businesses and banks, both of which are doing pretty well on the earnings front, unlike PMI, MTG or RDN. If they continue to watch costs and keep earnings growing, this could be the short squeeze of the century. 13% or… More

rhallbick (96.07)
Submitted January 16, 2018

Short term down-thumb after a 33% jump in the share price. Large share buyback by MBIA encouraged some investors, and seems to have squeezed some short positions. It remains to be seen whether the buybacks were prudent with their heavy exposure to… More

MBI VS S&P 500 (SPY)

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Recent Community Commentary

Read the most recent pitches from players about MBI.

Recs

1
Member Avatar rhallbick (96.07) Submitted: 1/15/2018 8:09:14 PM : Underperform Start Price: $7.23 MBI Score: -40.65

Short term down-thumb after a 33% jump in the share price. Large share buyback by MBIA encouraged some investors, and seems to have squeezed some short positions. It remains to be seen whether the buybacks were prudent with their heavy exposure to defaulting Puerto Rican debt, and a Barron's article claims it wasn't. Be that as it may, the company stock price immediately resumed its downward trend that began at the start of 2017, hence my "under-perform" claim.

Recs

0
Member Avatar konradgateau (51.35) Submitted: 7/23/2017 10:36:40 PM : Outperform Start Price: $10.43 MBI Score: -13.55

deep value situation, extremely low compared to book value, improving liquidity

Recs

6
Member Avatar jed71 (99.53) Submitted: 10/11/2016 12:53:18 PM : Underperform Start Price: $7.74 MBI Score: -4.14

There is something very seriously wrong with this company. I cannot completely put my finger on it, but the more I read, the more I feel like I am looking squarely at a company going bankrupt. Here are the two sections that raised eyebrows.

“Further, the remaining insured portfolio, aside from these exposures, could deteriorate and result in additional significant loss reserves and claim payments. MBIA Corp.'s ability to meet its obligations is limited by available liquidity and its ability to secure liquidity through financing and other transactions. In this circumstance there can be no assurance that MBIA Corp. will be successful in generating sufficient cash to meet its obligations. In particular, as of March 31, 2016, MBIA Corp. insures $776 million of gross par outstanding of notes issued by Zohar II 2005-1 Limited, a high yield corporate collateralized debt obligation ("CDO"), which matures in January of 2017. If cash flows generated by Zohar II are insufficient to pay the insured amount at maturity in full, MBIA Corp. will be called upon to satisfy any unpaid amount. If Zohar II fails to generate cash to cover a substantial amount of the insured exposure at maturity, or if MBIA Corp. is unable to reach a restructuring agreement or to raise sufficient liquidity, MBIA Corp. may ultimately have insufficient liquid resources to continue to pay claims. Any such failure to meet its obligations could cause the New York State Department of Financial Services ("NYSDFS") to put MBIA Insurance Corporation, exclusive of MBIA UK and MBIA Mexico, into a rehabilitation or liquidation proceeding and/or to order MBIA Insurance Corporation to cease paying any claims under its policies. Given the separation of MBIA Inc. and MBIA Corp. as distinct legal entities, the absence of any material intercompany lending agreements or cross defaults between the entities, and the lack of reliance by MBIA Inc. on MBIA Corp. for the receipt of dividends, the Company does not believe that a rehabilitation or liquidation proceeding with respect to MBIA Insurance Corporation would have any significant long-term liquidity impact on MBIA Inc. or result in a liquidation or similar proceeding of MBIA UK or MBIA Mexico. Such a proceeding could have material adverse consequences for MBIA Insurance Corporation, including the termination of insured credit default swap ("CDS") contracts for which counterparties may assert market-based claims, the acceleration of debt obligations issued by affiliates and insured by MBIA Insurance Corporation, the loss of control of MBIA Insurance Corporation to a rehabilitator or liquidator, and unplanned costs.”

And further….

“As of March 31, 2016 and December 31, 2015, the liquidity position of MBIA Inc. was $371 million and $416 million, respectively. The term "liquidity position" refers to cash and liquid assets available for general liquidity purposes. During the three months ended March 31, 2016, $105 million was released to MBIA Inc. under the MBIA group's tax sharing agreement (the "Tax Escrow Account"). Based on the Company's projections of National's dividends, payments into the Tax Escrow Account, and other cash inflows, the Company expects that MBIA Inc. will have sufficient cash to satisfy its debt service and general corporate needs. However, MBIA Inc. continues to have liquidity risk which could be triggered by deterioration in the performance of invested assets, interruption of or reduction in dividends or tax payments received from operating subsidiaries, impaired access to the capital markets, as well as other factors which cannot be anticipated at this time. Furthermore, failure by MBIA Inc. to settle liabilities that are also insured by MBIA Corp. could result in claims on MBIA Corp.”

The thing I keep wondering… why cite a very specific transaction, such as Zohar II? I might be wrong, but the only time I have ever heard of someone putting something like this at the top of their 10-Q is they were afraid of default. It looks like the part of the Zohar (the 2005-1 transaction) notes were transferred to Assured Guaranty in a recent transaction but the company still retains part the risk. The very scary part is that the company actually had to PAY an additional $23 MILLION in cash and give up its UK operations to get rid of this albatross. That seems like a terrible transaction for MBIA and it should speak volumes about the condition of the company to shareholders.

The company also has around $600MM in liquidity. While that might seem like a ton to many companies, for a company such as this with bets in the CDO and RMBS markets, this is a drop in the proverbial bucket. One bad event, and they are done. I cannot imagine that their strategic transaction with Assured Guaranty will be the last. I am seeing signs of capital constraints all over the place here. A good sign that there are some serious problems will be when you start reading about the New York DFS stepping in to investigate. If you own shares, THAT is the event you should be most afraid of. My guess is the bad news starts coming out late this year and ends in some sort of event towards the middle of next year. Buyer BEWARE.

Leaderboard

Find the members with the highest scoring picks in MBI.

Score Leader

DTBoojum

DTBoojum (30.00) Score: +307.68

This company is a longstanding short of smart players like Bill Ackman, based on its weak balance sheet and heavily leveraged exposure to some of the shakier players in the bond market. Its business shd plummet when it loses its AAA rating, which it shd never have had in the first place.

Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
ddoeditor 84.22 10/5/2006 Underperform 3Y $60.00 -82.23% +124.78% +207.01 1 Comment
patball00 41.27 3/14/2007 Underperform NS $62.57 -82.96% +119.04% +202.00 0 Comment
smartANDgutsy 70.88 2/8/2007 Underperform NS $69.71 -84.71% +109.86% +194.57 0 Comment
yippiekiyeh 97.77 6/12/2007 Underperform 5Y $63.86 -83.31% +100.45% +183.76 0 Comment
CRAZYCAPTAIN 32.77 6/12/2007 Underperform 1Y $63.86 -83.31% +100.45% +183.76 0 Comment
SkierSteve 90.01 6/11/2007 Underperform NS $63.74 -83.27% +100.11% +183.38 0 Comment
timedata 20.41 6/7/2007 Underperform NS $62.86 -83.04% +100.06% +183.10 0 Comment
ReticentFool 80.86 6/11/2007 Underperform 3W $63.30 -83.16% +99.51% +182.67 0 Comment
jmlinmn 26.30 6/7/2007 Underperform 3Y $62.87 -83.04% +99.50% +182.54 0 Comment
Jooonyer < 20 6/25/2007 Underperform NS $60.44 -82.36% +100.16% +182.52 0 Comment

Wall Street

See what the Wall Street professionals think, according to their public statements and filings.

Player Name Player
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
S&P
Gain
Score End Date Commentary
trackbtigresearc 49.92 8/15/2014 Outperform NS $10.10 +5.54% +45.40% -39.86 0 Comment
TrackZacks < 20 5/11/2012 Outperform 3M $9.37 -8.54% +1.88% -10.42 11/9/2012 @ $8.57 1 Comment
TrackMKMPartners 93.42 3/27/2012 Outperform NS $9.68 +10.12% +101.73% -91.61 0 Comment
TrackBerkowitz 86.15 6/30/2010 Outperform NS $5.61 +90.02% +180.92% -90.90 0 Comment
TrackZacks < 20 1/13/2010 Underperform 3M $5.45 +71.93% +18.31% -53.61 5/11/2012 @ $9.37 1 Comment
TrackJPMorgan 86.98 8/11/2009 Underperform NS $5.41 +77.08% +18.20% -58.88 4/30/2010 @ $9.58 0 Comment
TrackZacks < 20 1/20/2009 Underperform 3M $3.23 +16.10% +36.71% +20.61 11/11/2009 @ $3.75 1 Comment
TrackEinhorn 95.62 5/30/2008 Outperform 5Y $7.37 +53.60% -9.38% +62.98 8/27/2008 @ $11.32 1 Comment
TrackZacks < 20 5/16/2008 Underperform 3M $9.53 +3.99% -30.74% -34.72 10/20/2008 @ $9.91 1 Comment
TrackBillMiller 74.19 12/31/2007 Outperform NS $18.63 -58.40% -37.56% -20.84 11/7/2008 @ $7.75 2 Comments
TrackBobOlstein < 20 10/19/2007 Outperform 5Y $56.59 -84.84% -7.58% -77.25 11/9/2012 @ $8.58 0 Comment
TrackSchneider 84.49 9/30/2007 Outperform NS $60.32 -69.12% -4.17% -64.94 12/31/2007 @ $18.63 1 Comment
TrackWhitman < 20 9/30/2007 Outperform NS $60.32 -82.33% +96.16% -178.49 5 Comments
TrackDodgeCox 93.52 9/30/2007 Outperform NS $60.32 -69.12% -4.17% -64.94 12/31/2007 @ $18.63 1 Comment
TrackChrisDavis 90.30 9/30/2007 Outperform NS $60.32 -93.40% -28.39% -65.02 12/31/2009 @ $3.98 2 Comments
TrackJimCramer 85.44 8/9/2007 Underperform 3W $57.97 -81.61% +106.83% +188.44 0 Comment
TrackCalyonSec < 20 6/28/2007 Outperform NS $61.88 -83.19% -12.83% -70.36 4/30/2008 @ $10.40 0 Comment
TrackCitigroup 89.98 6/21/2007 Outperform NS $62.59 -85.76% -11.34% -74.42 1/18/2008 @ $8.91 0 Comment
TrackFBRCapitalM 88.04 3/6/2007 Outperform NS $63.99 -22.22% +9.41% -31.63 10/26/2007 @ $49.77 0 Comment
TrackDeutscheSec 86.88 12/5/2006 Outperform NS $67.10 -89.30% -4.85% -84.45 1/18/2008 @ $7.18 0 Comment
TrackBofASec 92.22 12/5/2006 Outperform NS $67.10 -86.72% -4.54% -82.18 1/18/2008 @ $8.91 0 Comment

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