QUOTE AND NEWS
Market Intelligence Center  Jul 14  Comment 
The patented option trade-picking algorithms behind MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered call trade on Fidelity National Financial (FNF) that includes 5.63% downside protection. Sell one contract of...
Market Intelligence Center  Jul 3  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithm on Fidelity National Financial (FNF) could yield about 4.32% (9.28% annualized, for comparison purposes only) in 170 days. Pair a long position in the stock with the...
Motley Fool  Jul 1  Comment 
Even as the stock market hit all-time record levels, these stocks saw their share prices fall -- but two of them had good excuses.
Forbes  Jul 1  Comment 
Topping the list of stocks with abnormal volume in yesterday's trading is Fidelity National Financial (NYSE: FNF), with 19.0x normal volume. In the prior session, FNF traded 45.91 million shares, versus normal volume of about 2.41 million....
Market Intelligence Center  Jun 24  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithms on Fidelity National Financial (FNF) could yield about 3.13% (21.52% annualized, for comparison purposes only) in 53 days. Pair a long position in the stock with the...
Market Intelligence Center  Jun 19  Comment 
Wednesday’s trading in Fidelity National Financial (FNF) gives options traders an opportunity for a 15.38% return. By selling the Sep. '14 $33.00 call and buying the Jan. '15 call at the $30.00 level for a net debit of $2.60, traders will book a...
Market Intelligence Center  May 30  Comment 
For a hedged play on Fidelity National Financial (FNF) MarketIntelligenceCenter.com’s patented trade-picking algorithms selected a Sep. '14 $33.00 covered call for a net debit in the $31.78 area. That is also the break-even stock price for the...
Market Intelligence Center  May 27  Comment 
Fidelity National Financial (FNF) presents a trading opportunity that offers a 3.06% return in just 116 days. A covered call on Fidelity National Financial at the $32.00 level expiring on Sep. '14 offers an assigned return rate of 3.06% or 9.63%...
SeekingAlpha  May 1  Comment 
Fidelity National Financial (FNF) Q1 2014 Earnings Call May 01, 2014 12:00 pm ET Executives Daniel Kennedy Murphy - Former Senior Vice President of Finance and Investor Relations of Fidelity National Financial William P. Foley -...
newratings.com  Apr 30  Comment 
WASHINGTON (dpa-AFX) - Fidelity National Financial, Inc. (FNF) reported a first-quarter GAAP net loss to shareholders of $22 million, or $0.08 per share, compared to net profit of $90 million, or $0.39 per share in the first quarter of 2013....




 

This article is about the title insurer. For other uses of fidelity, see Fidelity (disambiguation)

Fidelity National Financial is the second largest title insurer in the U.S. Its three main subsidiaries are Fidelity National Title Group, Fidelity National Property and Casualty Insurance Group as well as Sedgewick CMS, a minority-owned subsidiary. In 2005, Fidelity sold off its ownership stake in Fidelity National Information Services (FIS), which processes transactions for financial institutions.[1] Fidelity's revenues are tied to the real estate market. With fees and premiums earned only from the sales and refinancing of real estate.

On November 26th, 2008, Fidelity announced the signing of a stock purchase agreement with former competitor LandAmerica Financial Group (LFG). Under the terms of the stock purchase agreement, Fidelity National Title Insurance Company will acquire Lawyers Title Insurance Corporation and United Capital Title Insurance Company (both are for $139.4 million, for a total purchase price of $298.0 million.[2]

Business Overview

Business & Financial Metrics[3]

FNF earned a net income of $222.3 million after incurring a $179.0 million net loss in 2008.

IMAGE:FNF-Income2009.jpg[3]

Business Segments[4]

Fidelity operates through three reportable business segments: Fidelity National Title Group, Specialty Insurance, and Corporate and Other.

*Fidelity Title Group: This segment underwrites title insurance.

*Specialty Insurance: This segment issues flood, homeowners', automobile, and other personal insurance policies.

*Corporate and Other: Operations reported in this segment are actions of the holding company or other unallocated activities.

IMAGE:FNF-Segments2009.jpg[5]

Key Trends and Forces

The Weak Housing Market reduces the demand for Title Insurance

Premiums from Title Insurance policies generate the majority of Fidelity's revenue. Title Insurance policies are sold along with the sale of real estate. When more properties are sold, more premiums can be collected. However, with today's slow market for real estate, fewer properties are sold leaving fewer opportunities for Fidelity to earn premiums from Title Insurance policies.

Interest Rates strongly influence the volume of mortgage refinances

High interest rates make the option of refinancing mortgages unattractive, since homeowners have to pay more for their loans. Drops in interest rates create a greater incentive to refinance and therefore more opportunities for Fidelity to earn Title Insurance premiums.

Effects of Economy-at-large

During an economic downturn, fewer consumers are willing to purchase a new home, diminishing the number of potential Title Insurance policies. In addition, fewer consumers are willing to purchase new cars and other products covered by Fidelity's Specialty Insurance segment. The reverse is true during an economic expansion. The Economic Cycles affect the U.S. Housing Market, Interest Rates, and the Appreciation of home prices.

Competition

The title insurance industry is an oligopoly, with the top five firms contributing 92.6% of the industry's revenues. [6] FNF is currently the second-largest title insurance underwriter and shares a co-leading position with LandAmerica in the commercial title insurance market. FNF's largest competitors are:

  • First American (FAF) is also a holding company and has earned at least 69% of its revenue from Title Insurance premiums over the past three years. First American has the largest market share in U.S. title insurance and competes directly with Fidelity for premiums, escrow, closing, and processing related fees. First American also operates an Information Technology Segment, which provides Mortgage and Property Information.[7]
  • LandAmerica Financial Group (LFG)
  • Old Republic International (ORI) is an insurance underwriter operating in three segments: General Insurance, Mortgage Guaranty, and Title Insurance. Old Republic's primary source of revenue is its General Insurance segment.
  • Stewart Information Services (STC) provides title insurance and related services through locations in the United States and several international markets. The company meets the needs of real estate and mortgage industries through the electronic delivery of services required for settlement. Stewart's services include title reports, flood determinations, and credit reports.Stewart Information Services has two operating segments: Title Insurance and Real Estate Information.[8]

References

  1. FNF 2007 10-K, Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations, page 40
  2. LandAmerica Signs Stock Purchase Agreement for Underwriters
  3. 3.0 3.1 FNF 2009 10-K pg. 126  
  4. FNF 2009 10-K pg. 1  
  5. FNF 2009 10-K pg. 113  
  6. [1]
  7. FAF 2007 Annual Report, Item 1: Business, page 3
  8. STC 2007 Annual Report, Item 1: Business, page 3
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