Wilbur Ross Stays Bullish On Assured Guaranty

Ross's investment firm WL Ross & Co., a unit of Invesco Ltd.(IVZ) owns 19.8 million shares in Assured, according to his latest 13F filing with the Securities and Exchange Commission. According to Bloomberg data, which shows only 19.4 million shares, his average cost was $18.07, compared to $14.11 in late afternoon trading Friday. Ross also sits on Assured's Board of Directors.

Ross bought the majority of his shares in April 2008 for an average price of $23.47. He kept buying as the stock fell, however, never paying more than $12 per share after the initial misstep.

Assured, which like other bond insurers ran into trouble when it expanded out of municipal bond insurance into insuring bonds backed by pools of mortgages underwritten during the housing boom, hopes to grow its municipal bond underwriting business. One obstacle is the threat of a downgrade Moody's Investors Service(MCO) . BTIG analyst Mark Palmer argues the shares are worth "north of $16 and perhaps much higher," even if it never writes another insurance contract, however.

Not all big investors are fans of insuring muni bonds. Berkshire Hathaway chairman Warren Buffett called it a "dangerous business" after he exited the sector in 2009.

"I do not agree about the "dangerous business" comment This company has been profitable every quarter, all through the crisis," Ross wrote in response to Buffett's comments.

Asked whether he is interested in Assured as a runoff play or as a growing muni bond insurer, Ross wrote, "either way the stock is very cheap in my opinion."

-- Written by Dan Freed in New York.

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