Hi, Brendan Watt. Nice near tripling there on OI!
I keep re-evaluating FAF, which I also hold. It's safe enough imo, if one assumes fairly competent and honest management - the business looks like it won't be obsoleted.
Still, in past, the stock has sold for lower prices and at lower ratios of p/book, p/sales, p/earnings. I don't see what might propel the stock because title is such a big portion, and that venue of growth won't continue - as you noted with next year expected to have lower eps.
I like that they are trying to expand from their title insurance business and become known for an expertise in handling business records. Acquiring American Driving Records, if they didn't overpay for it, was a good move in that direction, for example. I once worked for an auto insurance company: before a prospective policy could be approved (and maybe even with some renewals), the underwriters would get (buy) the department of motor vehicles history on the policyholder. This info. often came from 3rd parties (like Am. Driving's records, I am guessing.) My point: each inquiry is small bucks, but the number of inquiries to Am Driving's links/databases can be steady, if not large. (aside: And the possible or actual big-brother, Orwellian, aspect to this business is possibly a subject for another thread.)
FAF also has a trust operation where they manage over $2Billion. Not much said about it in the annual report or that I can find in my references.
Paul S. |
