Assured Guaranty's Shares Jumped: 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 credit protection specialist Assured Guaranty (NYSE: AGO  ) jumped 11% on heavy trading.

So what: Analyst firm BTIG started coverage on Assured with a buy rating and a $35 price target. The firm is looking for more than a triple here, based on "the viability of its business model" being underappreciated by investors today.

Now what: The same firm also issued a similarly glowing recommendation of sector rival MBIA (Nasdaq: MBI  ) last week, sending those shares up by more than 30%. BTIG has an unusually rosy view of the credit protection market and hopes to capitalize if that sector bounces back from this economic crisis.

But is this the bottom, or will BTIG catch a couple of falling knives? If anybody claims to know the answer right now, that person also has a nice bridge to sell you in New York. Playing this sector long or short could be bad for your portfolio's health, though volatility-seeking strategies should work out all right.

Interested in more info about Assured Guaranty? Click here to add it to My Watchlist.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 06, 2011, at 4:56 AM, Sotograndeman wrote:

    To say the least, this is a very superficial commentary. It has essentially zero value for investors, adding nothing to the news release. I'd encourage TMF to write fewer, but more informed, more in-depth articles. AGO, a major holding of Wilbur Ross, one of the most astute investors on the planet, is certainly a worthwhile company to analyze.

  • Report this Comment On December 06, 2011, at 11:02 AM, Sotograndeman wrote:

    Just to add that, according to InsiderTrading.org, Wilbur Ross purchased almost 2.5 million AGO shares Dec 1-2 last week at a price of $11.17-$11.22

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