Assured Guaranty Ltd’s acquisition of a rival this summer may help shares of the U.S. bond insurer double or even triple, Barron’s said on Sunday.
In July, Assured Guaranty bought Financial Security Assurance, wiping out a key rival. The merged company could earn about $950 million, or more than $6 a share in a normal year, compared to $2 in 2009.
Assured Guaranty is the only one of its competitors with the wherewithal to write insurance on new issues of municipal bonds and bond securitizations, the financial newspaper wrote.
Some analysts and investors, however, are wary about Assured, given its exposure to $24 billion in guaranteed securitizations backed by troubled asset classes, Barron’s noted.
Assured shares closed at $18.15 on Friday on the New York Stock Exchange. The stock is up nearly 60 percent this year.
