STC
Stewart Information Services Corp.
Finance/Real Estate, Event Driven/Special Sit
07/22/2016
Presented
| Date | 07/18/2016 |
| Price | $42.94 |
| Market Cap | $1.00B |
| Ent Value | $0.97B |
| P/E Ratio | N/A |
| Book Value | $26.62 |
| Div Yield | 0% |
| Shares O/S | 23.35M |
| Ave Daily Vol | 135,898 |
| Short Int | 1.22% |
Current
| Price | $70.05 |
| Market Cap | $1.94B |
| Stewart Information Services Corp. is a title insurance and real estate services company. It provides services to homebuyers and sellers; residential and commercial real estate professionals; mortgage lenders and servicers; title agencies and real estate attorneys; home builders; and United States and foreign governments. The company also provides loan origination and servicing support; loan review services; loss mitigation; REO asset management; home and personal insurance services; tax-deferred exchanges; and technology to streamline the real estate process. It operates through three segments: Title Insurance & Related Services and Mortgage Services and Corporate. Title Insurance and Related Services segment include the functions of searching, examining, closing and insuring the condition of the title to real property. The title segment also includes certain ancillary services provided for tax-deferred exchanges and home and personal insurance services. The Mortgage Services segment includes a diverse group of products and services provided to multiple markets. It services are provided through its Stewart Lender Services, PropertyInfo Corporation and Stewart Government Services businesses. The Corporate segment consists of the expenses of the parent holding company, certain other corporate overhead expenses, and the costs of its centralized support operations not otherwise allocated to the lines of business. The company was founded in 1970 and is headquartered in Houston, TX |
Publicly traded companies mentioned herein: Fidelity National Financial Inc (FNF), First American Financial Corp (FAF), Old Republic International Corp (ORI), Stewart Information Services Corp (STC)
Highlights
The presenter is long shares of Stewart Information Services (STC), a $1 billion market cap title insurance company, and sees a high probability that the company becomes an acquisition target over the next 12 months. Activist investors such as Foundation and Bulldog have been pushing for change at the company, which is the 4th largest title insurer in the US. Since 2014, three independent directors have been added to the board and the dual share class structure has been collapsed (as of April 2016). Most recently, Foundation increased its stake and started pressing for further change. At $43 the risk/ reward appears to be favorable because the presenter’s model (assuming a 40% premium is paid) suggests the deal could be ~30% accretive to either Fidelity National (FNF) or First American (FAF).
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.