ACT enters the post-earnings stretch with a mixed set of signals: a beat on earnings, a dividend hike that signals management confidence, and yet a stock still weighed down by its parent's persistent selling.
Q1 results, reported after the close on May 5, delivered adjusted EPS of $1.21 — three cents above estimates. Revenue of $312.1 million narrowly missed the $315.1 million consensus. Alongside the print, Enact raised its quarterly dividend 14% to $0.24 per share and outlined approximately $500 million in planned capital returns for 2026. Those are the numbers of a company that believes it has capital to spare. The dividend score ranks in the 99th percentile of the universe — a telling signal about how the business generates and distributes cash.
The earnings beat and dividend announcement couldn't prevent the stock from slipping 0.2% on the day and down nearly 4% on the week to $42.31. The broader mortgage insurance peer group fared worse: NMIH fell 9.2% and MTG dropped 9.5% over the same period, so the relative read on ACT is less alarming than the headline move suggests. The sector was absorbing macro headwinds uniformly. Still, the absolute softness — and the 52-week-high look of $49 now a fair distance away — points to a market that remains cautious on the private mortgage insurance space.
The ownership structure is the unavoidable backdrop. Genworth Financial holds roughly 80% of shares outstanding, and the insider table is essentially a log of Genworth Holdings Inc. selling. In late March Genworth sold 820,567 shares for roughly $33.6 million. Another 560,453 shares were sold on April 30 for approximately $23.8 million. The 90-day net share figure of 1.9 million sold represents nearly $80 million in aggregate sales by the parent. The discount on ACT to intrinsic is in part a structural one: while Genworth continues to monetise the position, the free float remains constrained and the technical overhang is real. Only about 20% of shares are outside parent control, which concentrates liquidity in a narrow slice of the register.
Short positioning tells a measured story. Short interest is 2.5% of the free float — meaningful enough to notice but nowhere near the territory that signals aggressive directional conviction. It has crept up 6.3% over the past month, a steady rather than sudden build. Borrowing ACT remains cheap at 0.51% annualised, and the lending pool is far from stressed — availability is ample and well clear of any squeeze-pressure thresholds. The ORTEX short score of 65.5 places the stock in a moderately elevated range, but the ranking in the 7th percentile on short score (relative to all stocks) and only the 35th percentile on availability tightness confirm there is no imminent borrow-driven catalyst here. Options reflect a modest defensive tilt: the put/call ratio has jumped to 0.22 from a 20-day average closer to 0.09, putting the z-score at 1.8 — elevated for ACT's typically call-dominant tape, but still well short of outright bearish extremes.
Analyst coverage has been drifting constructively. B of A's Mihir Bhatia lifted his target to $49 from $48 in late April while maintaining a Buy — the most recent move, and the most bullish on the Street. The consensus price target sits at $45.20, representing about 7% upside from current levels. The valuation picture supports the bull case: a P/E of 8.6x and price-to-book just below 1x are both near the low end of historical ranges for the sector, and the EV/EBIT ranking in the 83rd percentile signals the company generates strong operating profit relative to its enterprise value. EPS surprise ranks in the 75th percentile — consistent with a business that tends to deliver above expectations.
The next confirmed earnings event is on May 13. With Q1 already in the books, the focus will shift to commentary on new insurance written, credit trends in the housing market, and the pace of Genworth's continued stake reduction — the variable that arguably matters most for where the stock trades relative to its fundamental value.
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