MGIC Shares Surged Again: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mortgage insurer MGIC Investment (NYS: MTG) were hopping again today, gaining as much as 14% in intraday trading after the company released its monthly operating statistics.

So what: In its monthly report, MGIC showed that it wrote $1.4 billion in new business during October and that its primary delinquent inventory declined from 180,894 loans to 179,824. New delinquency notices were at 14,545.

The first thing to note about this is that the company is writing a good amount of new business -- that's good news as investors hope to see the company continue to rebuild after the disastrous housing meltdown. In addition, the pile of delinquent inventory continues to move in the right direction -- down.

To put it in perspective, in August, the company wrote $1.3 billion in new insurance and finished the period with 183,338 delinquent loans. In October 2010, it also wrote $1.3 billion in new business but finished the month with 219,934 delinquent loans. New delinquency notices during October of last year were 16,701.

Now what: The release today follows on the heels of yesterday's revelation that hedge fund shark J. Kyle Bass placed a sizeable bet on the company. Nothing against Bass and his investing prowess, but I view today's news as more exciting for investors, since it shows the actual fundamentals of the company continuing to improve.

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