Aegis Value Fund / Aegis Financial Corporation on Radian Group Inc.
Thesis
Radian was Aegis's largest purchase in the first half of 2026. The fund bought the shares at roughly book value and about 7-8 times earnings despite a record mortgage-insurance portfolio, strong credit quality and a history of compounding book value per share. Excess capital sits well above regulatory requirements, while third-party reinsurance transfers part of the tail risk from a severe mortgage-credit downturn. The acquisition of specialty insurer Inigo was done at a valuation Aegis considers reasonable relative to comparable Lloyd's businesses and diversifies earnings toward higher-margin specialty insurance. Aegis believes that diversification is not yet fully appreciated by the market.
“Our largest purchase in the first half of 2026 was Radian Group (RDN).”
Key risks
- A severe economic downturn could deteriorate mortgage credit
- The Inigo acquisition is dilutive to tangible book value in the near term