Assured Guaranty's Accretive Buybacks Continue To Grow Intrinsic Value

Core Viewpoint - Assured Guaranty (AGO) presents a significant investment opportunity as it trades at a substantial discount to its intrinsic value, with strong potential for returns for investors [1][2] Financial Performance - In Q2, AGO reported adjusted operating income of $80 million, or $1.44 per share, with adjusted operating shareholders' equity per share at $109.88 and adjusted book value per share at $161.65 [2] - The company achieved $155 million in present value of new business production (PVP) on $132 million of Gross Written Premium (GWP), marking the second-best direct GWP and best direct PVP since 2009 [2] - The first half PVP of $218 million is the highest since 2009, excluding a large portfolio assumption in 2018 [2] Shareholder Value and Buybacks - Since the start of the repurchase program in 2013, AGO has repurchased 148 million shares for $5.2 billion, representing 76% of total shares outstanding as of January 1, 2013 [1] - In Q2, AGO repurchased $152 million worth of shares and paid $17 million in dividends, contributing to a 15% increase in adjusted operating shareholders' equity over the past year [2] - The company is authorized to purchase an additional $275 million of its common shares [1] Market Position and Risk Management - AGO holds a 58% market share of primary-market insured par sold, with below investment grade exposure at only 2.2%, one of the lowest levels in its history [2] - The company has effectively managed risks associated with past crises, including the Puerto Rico default, and is nearing resolution on related litigation [1][2] - Current concerns are primarily related to hospital systems facing cost pressures, but credit impairment is expected to be minimal due to the critical nature of these institutions [2] Future Outlook - The company is expected to continue growing its book value per share metrics through ongoing buybacks and retained earnings, with a target price of approximately $90 per share, representing a potential upside [2] - The favorable ruling in the Puerto Rico case may further reduce risks and enhance the company's valuation [2] - As the insured portfolio grows and excess capital is utilized for buybacks, return on equity (ROE) is anticipated to expand [2]