Message Font: Serif | Sans-Serif
No. of Recommendations: 1
There are a number of reasons which might be plausible.

1. The selling was overdone to begin with -- FAF trades at a discounted P/E to its peer group.

2. Cost-cutting measures including centralization of information systems and title processing, layoffs and reforming some telecom contracts should produce better bottom-line results.

3. Seasonality in title orders. Apparently the first quarter is usually the worst in the year (according to a Merrill Lynch report I'm reading, anyway).

4. The perception that Greenspan is probably done with rate hikes for a while, giving this highly interest rate sensitive company a breather.

Will FAF continue to rise again? It will probably be trading in fits and starts until rates level out or begin to decline. It still hasn't cut down its reliance on real estate-driven revenue, despite some of the comments the company leadership has said. However, they are getting more exposure to the public and to Wall Street (see the articles in Forbes, Information Week, et al) and, like any other product, that can't hurt interest in the stock.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.