As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at MBIA
Stats on MBIA
|2011 YTD Return||(1%)|
|Market Cap||$2.29 billion|
|Total Revenue, Last 12 Months||$432 million|
|Net Loss, Last 12 Months||($243 million)|
|CAPS Rating (out of 5)||*|
Sources: S&P Capital IQ; Motley Fool CAPS.
How did MBIA hold up in 2011?
MBIA was unfortunate enough to find itself in two very painful industry niches in recent years. Like mortgage insurers Radian Group
Interestingly, some have argued that the existence of this insurance has actually hampered the recovery in housing. Fellow Fool Morgan Housel noted that because private mortgage insurance covers defaults, banks are less likely to eat losses by granting principal writedowns. That often leads to behavior that's not in MBIA's best interest, because losses can get worse the longer a bank waits to take action to resolve a potential problem.
So far this year, though, MBIA has had some good news. An anticipated downturn in muni bonds hasn't materialized, helping the company avoid losses on that front. Moreover, with shares still at very low levels, some analysts see far more upside than risk within the sector.
But that doesn't mean everything's perfect for the company. One problem MBIA faces is potential liability to those who relied on its insurance. Earlier this month, the company paid a $1.1 billion settlement to Morgan Stanley
Among financials, MBIA has some promise, but it isn't necessarily your best bet. Let us point you in a better direction. Read the Motley Fool's latest special report on banking to find out which banks the smartest investors are buying now. The report is free, but it won't be there forever, so check it out today.
Click here to add MBIA to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. The Motley Fool owns shares of Bank of America. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.