Based on the aggregated intelligence of 160,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mortgage insurer PMI Group (NYSE: PMI) has received a distressing two-star ranking.

With that in mind, let's take a closer look at PMI's business and see what CAPS investors are saying about the stock right now.

PMI facts

Headquarters (Founded)

Walnut Creek, Calif. (1972)

Market Cap

$563.5 million


Thrifts and mortgage finance

Trailing-12-Month Revenue

$923.9 million


CEO Stephen Smith (since 2006)

CFO Donald Lofe, Jr. (since 2003)

Return on Equity (Average, Past 3 Years)


1-Year Return



Radian Group (NYSE: RDN)

MGIC Investment (NYSE: MTG)

Genworth Financial (NYSE: GNW)

Highly Rated Financial Stock Alternatives

US Bancorp (NYSE: USB)

National Bank of Greece (NYSE: NBG)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 40% of the 215 All-Star members who have rated PMI believe the stock will underperform the S&P 500 going forward. These bears include the second- and eighth-ranked members in all of CAPS, vanamode and tenmiles, respectively.

Just two days ago, vanamode wrote that PMI "has said many times they are undercapitalized and it would be close to irresponsible not to use the tripled stock price for a large offering." Our CAPS All-Star continues: "Also, total volume in the last 10 days has been more than double the float and some six times the average. This simply has to calm down to more reasonable levels at some point."

In a pitch from last week, tenmiles expands on that bearishness:

There are some incremental positives -- (1) for the first time in four years newly delinquent homeowners were outnumbered by those catching up on late mortgages; (2) they can now issue mortgage guarantee insurance for [Freddie Mac (NYSE: FRE)], since they are letting them game the system as their main arm doesn't meet regulatory capital requirements. Still, I really wouldn't advise betting the mortgage on this one after recent run; expect they will use recent stock strength to dilute ... expect renewed economic and market headwinds beginning in Q3/Q4 and this one will be in the crosshairs.

What do you think about PMI, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.