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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: patron_anejo_por_favor who wrote (137447)12/6/2001 2:00:01 PM
From: reaper  Read Replies (3) of 436258
 
my fave indicator of origination volume (and what the market thinks) is Fidelity National Financial (FNF). These guys are the biggest title insurance players out there. As you guys likely know, even when you re-finance you have to pay a new title insurance fee.

FNF is actually an AWESOME business with great cash flow and basically zero credit risk (they do have some residual interests in sercuritizations). they are obviously going to have an off-the-charts quarter here in Q4 (after a whole year of great quarters) and yet the stock trades just above book (granted, about half of book is goodwill from when they bought Chicago Title), at less than 10x EPS, and at about 4-5x the cash from operations they are going to generate this year.

So anyway, either (i) FNF is telling us that originations are going to be WAYYYYY down next year; or (ii) FNF is SERIOUSLY mis-priced and a paired trade of long FNF and short some combination of home builders or mortgage originators is in order.

Cheers
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