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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 8/10

vs
industry
vs
history
Cash to Debt 1.35
FAF's Cash to Debt is ranked higher than
69% of the 190 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 2.25 vs. FAF: 1.35 )
FAF' s 10-Year Cash to Debt Range
Min: 1.35   Max: 2.96
Current: 1.35

1.35
2.96
Equity to Asset 0.38
FAF's Equity to Asset is ranked higher than
89% of the 189 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 0.24 vs. FAF: 0.38 )
FAF' s 10-Year Equity to Asset Range
Min: 0.33   Max: 0.39
Current: 0.38

0.33
0.39
Interest Coverage 20.31
FAF's Interest Coverage is ranked higher than
71% of the 161 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 20.35 vs. FAF: 20.31 )
FAF' s 10-Year Interest Coverage Range
Min: 10.31   Max: 51.56
Current: 20.31

10.31
51.56
F-Score: 4
Z-Score: 1.42
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 6/10

vs
industry
vs
history
Operating margin (%) 6.27
FAF's Operating margin (%) is ranked higher than
63% of the 188 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 10.91 vs. FAF: 6.27 )
FAF' s 10-Year Operating margin (%) Range
Min: -3.44   Max: 10.29
Current: 6.27

-3.44
10.29
Net-margin (%) 3.76
FAF's Net-margin (%) is ranked higher than
60% of the 188 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 8.52 vs. FAF: 3.76 )
FAF' s 10-Year Net-margin (%) Range
Min: -2.35   Max: 6.63
Current: 3.76

-2.35
6.63
ROE (%) 7.60
FAF's ROE (%) is ranked higher than
63% of the 189 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 10.24 vs. FAF: 7.60 )
FAF' s 10-Year ROE (%) Range
Min: -7.41   Max: 12.82
Current: 7.6

-7.41
12.82
ROA (%) 2.86
FAF's ROA (%) is ranked higher than
75% of the 190 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 2.60 vs. FAF: 2.86 )
FAF' s 10-Year ROA (%) Range
Min: -2.67   Max: 4.98
Current: 2.86

-2.67
4.98
ROC (Joel Greenblatt) (%) 85.99
FAF's ROC (Joel Greenblatt) (%) is ranked higher than
63% of the 149 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 179.00 vs. FAF: 85.99 )
FAF' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -47.57   Max: 136.09
Current: 85.99

-47.57
136.09
Revenue Growth (%) 7.30
FAF's Revenue Growth (%) is ranked higher than
68% of the 166 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 9.10 vs. FAF: 7.30 )
FAF' s 10-Year Revenue Growth (%) Range
Min: 0   Max: 7.3
Current: 7.3

0
7.3
EBITDA Growth (%) 8.20
FAF's EBITDA Growth (%) is ranked higher than
70% of the 154 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 9.80 vs. FAF: 8.20 )
FAF' s 10-Year EBITDA Growth (%) Range
Min: 0   Max: 19.9
Current: 8.2

0
19.9
EPS Growth (%) 12.50
FAF's EPS Growth (%) is ranked higher than
77% of the 162 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 10.10 vs. FAF: 12.50 )
FAF' s 10-Year EPS Growth (%) Range
Min: 0   Max: 32.9
Current: 12.5

0
32.9
» FAF's 10-Y Financials

Financials


Revenue & Net Income
Equity & Asset
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2013

FAF Guru Trades in Q1 2013

RS Investment Management 460,200 sh (New)
Jim Simons 1,017,600 sh (+743.78%)
Paul Tudor Jones 33,700 sh (+116.03%)
Joel Greenblatt 13,520 sh (+62.19%)
Zeke Ashton 265,000 sh (+26.19%)
Whitney Tilson 166,546 sh (+23.37%)
Steven Cohen Sold Out
Richard Pzena Sold Out
John Keeley 2,132,995 sh (-2.57%)
John Rogers 7,414,965 sh (-6.93%)
Chuck Royce 289,661 sh (-34.42%)
» More
Q2 2013

FAF Guru Trades in Q2 2013

RS Investment Management 2,910,492 sh (+532.44%)
Joel Greenblatt 17,918 sh (+32.53%)
Whitney Tilson 210,000 sh (+26.09%)
Zeke Ashton 315,000 sh (+18.87%)
John Rogers 8,650,370 sh (+16.66%)
Paul Tudor Jones 38,400 sh (+13.95%)
Chuck Royce 289,661 sh (unchged)
John Keeley 2,091,525 sh (-1.94%)
Jim Simons 680,400 sh (-33.14%)
» More
Q3 2013

FAF Guru Trades in Q3 2013

Manning & Napier Advisors, Inc 216,960 sh (New)
Sarah Ketterer 844,700 sh (New)
Arnold Schneider 129,610 sh (New)
Steven Cohen 27,154 sh (New)
Jean-Marie Eveillard 391,747 sh (New)
RS Investment Management 4,011,406 sh (+37.83%)
Zeke Ashton 400,000 sh (+26.98%)
John Rogers 9,839,625 sh (+13.75%)
Joel Greenblatt 18,824 sh (+5.06%)
Whitney Tilson Sold Out
Paul Tudor Jones Sold Out
Chuck Royce 288,061 sh (-0.55%)
Jim Simons 518,000 sh (-23.87%)
John Keeley 790,960 sh (-62.18%)
» More
Q4 2013

FAF Guru Trades in Q4 2013

Paul Tudor Jones 118,000 sh (New)
David Dreman 1,690 sh (New)
Sarah Ketterer 1,657,732 sh (+96.25%)
Arnold Schneider 199,019 sh (+53.55%)
RS Investment Management 4,445,004 sh (+10.81%)
Jean-Marie Eveillard 425,247 sh (+8.55%)
John Keeley 819,670 sh (+3.63%)
John Rogers 9,964,903 sh (+1.27%)
Chuck Royce 289,561 sh (+0.52%)
Zeke Ashton Sold Out
Joel Greenblatt 18,624 sh (-1.06%)
Manning & Napier Advisors, Inc 211,200 sh (-2.65%)
Steven Cohen 14,125 sh (-47.98%)
Jim Simons 112,800 sh (-78.22%)
» More
» Details

Insider Trades

Latest Guru Trades with FAF

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
David Dreman 2013-12-31 New Buy$23.62 - $28.26 $ 25.920%1690
John Keeley 2013-09-30 Reduce -62.18%0.57%$20.9 - $24.61 $ 25.9216%790960
Jean-Marie Eveillard 2013-09-30 New Buy0.03%$20.9 - $24.61 $ 25.9216%391747
Joel Greenblatt 2013-06-30 Add 32.53%$20.53 - $27.34 $ 25.925%17918
Joel Greenblatt 2013-03-31 Add 62.19%0.01%$23.01 - $25.57 $ 25.926%13520
Joel Greenblatt 2012-12-31 New Buy0.01%$22.04 - $24.69 $ 25.9210%8336
Charles Brandes 2012-12-31 Sold Out 0.01%$22.04 - $24.69 $ 25.9210%0
Charles Brandes 2012-09-30 Reduce -40.34%$16.46 - $22.25 $ 25.9238%40853
Charles Brandes 2011-09-30 Reduce -63.1%0.01%$12.72 - $16.02 $ 25.9276%65592
Premium More recent guru trades are included for Premium Members only!!
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Peter Lynch Chart ( What is Peter Lynch Charts )

Guru Investment Theses on First American Financial Corp

John Rogers Comments on First American Financial - Nov 05, 2013

Rising mortgage rates drove down First American Financial (FAF)'s stock price as Wall Street investors feared an end to the refinancing boom. Over the near-term, we anticipate downward earnings revisions as refinancings come to a halt rather quickly and new home sales take time to ramp up. But looking further out, we know title insurance policies on new home purchases are twice as profitable as refinancings which will drive earnings at First American. Not to mention, with the stock trading at just 10x consensus earnings, our bullishness is only magnified by the stock's incredibly cheap valuation.

From John Rogers' Ariel Fund and Ariel Appreciate Fund portfolio manager letter third quarter 2013.


Check out John Rogers latest stock trades

John Rogers Comments on First American Financial Corp. - Jul 25, 2013

Mortgage insurer First American Financial Corp. (FAF) slid -13.35% despite a good overall quarter. We believe the market was essentially confused. The company's official earnings per share were $0.33 versus the $0.42 consensus. The key reason for the miss, however, was a large reserve charge dating to the 2006-2007 period. Without the charge, earnings would have been roughly $0.44 per share. Revenues exceeded expectations by increasing +19%, and purchase orders were up +13%. Admittedly, those were trade-offs for refinancings, which were down -7%. Management was upbeat and optimistic about business, a perspective we think was fully justified. The stock now trades below 1x book, which we think is very cheap given its profitability, powerful market position and business trajectory.

From John RogersAriel Appreciation Fund Second Quarter 2013 Commentary.


Check out John Rogers latest stock trades

John Rogers Comments on First American Financial Corp - Oct 25, 2012

In addition, title insurer First American Financial Corp. (FAF) gained +28.24% due to a solid earnings report. Wall Street had expected the company to earn $0.43 per share, but First American delivered $0.68 on very strong revenue growth driven by heavy refinancing activity. In our opinion, the analyst community continues to underappreciate the company's considerable operating leverage. Pretax margins were 11.7% for the quarter, well ahead of the company's full-year goal of 8%-10%. Despite the stock's considerable gains this year, it continues to be a remarkable bargain in our opinion; it still trades below its book value. As the market comes around to the now widespread view that housing-related companies are connected to a strong segment of the economy rather than a weak one, we think the valuation penalty they have lately suffered is reasonably likely to disappear or even turn into a benefit.

From Ariel Funds' third quarter commentary.


Check out John Rogers latest stock trades

Top Ranked Articles about First American Financial Corp

Centaur Capital Partners' Third Quarter Top Holdings
Zeke Ashton of Centaur Capital Partners keeps a fairly concentrated portfolio valued at $116 million. The guru sold out of four of his previous holdings and had a heavy quarter of buying as 13 of his 33 stocks were new buys. The following five companies represent Ashton’s top five holdings. [b] Read more...
T2 Partners Update - Whitney Tilson Sells Out 29 Companies in Third Quarter
The changes in the third quarter portfolio of T2 Partners Management LP, led by Guru Whitney Tilson, include 29 sell outs, with high-impact sells of First American Financial Corp. (FAF), Apple Inc. (AAPL) and EMC Corporation (EMC). Whitney Tilson’s updated portfolio lists 40 stocks, 11 of them new, and a total value at $63 million. The quarter-over-quarter turnover is 26%. The Tilson portfolio is weighted with financial services at 32.6%, consumer cyclical at 24.8% and real estate at 11.1%. Whitney Tilson is averaging a return of 11.65% over 12 months, Read more...
John Rogers Comments on First American Financial
Rising mortgage rates drove down First American Financial (FAF)'s stock price as Wall Street investors feared an end to the refinancing boom. Over the near-term, we anticipate downward earnings revisions as refinancings come to a halt rather quickly and new home sales take time to ramp up. But looking further out, we know title insurance policies on new home purchases are twice as profitable as refinancings which will drive earnings at First American. Not to mention, with the stock trading at just 10x consensus earnings, our bullishness is only magnified by the stock's incredibly cheap valuation. Read more...
On the Low - Four Insurance Stocks Held by Numerous Billionaires
According to Deloitte’s Property & Casualty Industry Outlook for 2013: “…Economic recovery has been erratic over the past two years, but there have been gains in private sector hiring as well as auto sales, creating millions of new insurable exposures for property and casual carriers.” The report advises insurance companies to prepare to adapt to a “new normal,” and expect to ‘take two-steps forward, one-step back’ in a recovering economy. Read more...
John Rogers Comments on First American Financial Corp.
Mortgage insurer First American Financial Corp. (FAF) slid -13.35% despite a good overall quarter. We believe the market was essentially confused. The company's official earnings per share were $0.33 versus the $0.42 consensus. The key reason for the miss, however, was a large reserve charge dating to the 2006-2007 period. Without the charge, earnings would have been roughly $0.44 per share. Revenues exceeded expectations by increasing +19%, and purchase orders were up +13%. Admittedly, those were trade-offs for refinancings, which were down -7%. Management was upbeat and optimistic about business, a perspective we think was fully justified. The stock now trades below 1x book, which we think is very cheap given its profitability, powerful market position and business trajectory. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 15.10
FAF's P/E(ttm) is ranked lower than
55% of the 166 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 11.30 vs. FAF: 15.10 )
FAF' s 10-Year P/E(ttm) Range
Min: 8.46   Max: 21.1
Current: 15.1

8.46
21.1
P/B 1.10
FAF's P/B is ranked higher than
69% of the 190 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 1.23 vs. FAF: 1.10 )
FAF' s 10-Year P/B Range
Min: 0.56   Max: 1.22
Current: 1.1

0.56
1.22
P/S 0.57
FAF's P/S is ranked higher than
86% of the 190 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 1.12 vs. FAF: 0.57 )
FAF' s 10-Year P/S Range
Min: 0.29   Max: 0.62
Current: 0.57

0.29
0.62
PFCF 7.50
FAF's PFCF is ranked higher than
66% of the 154 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 8.50 vs. FAF: 7.50 )
FAF' s 10-Year PFCF Range
Min: 4.73   Max: 45.38
Current: 7.5

4.73
45.38
EV-to-EBIT 9.90
FAF's EV-to-EBIT is ranked higher than
56% of the 180 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 9.50 vs. FAF: 9.90 )
FAF' s 10-Year EV-to-EBIT Range
Min: 4.9   Max: 11.7
Current: 9.9

4.9
11.7
PEG 1.40
FAF's PEG is ranked higher than
55% of the 102 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 0.90 vs. FAF: 1.40 )
FAF' s 10-Year PEG Range
Min: 0   Max: 1.5
Current: 1.4

0
1.5

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 1.85
FAF's Dividend Yield is ranked lower than
67% of the 150 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 2.51 vs. FAF: 1.85 )
FAF' s 10-Year Dividend Yield Range
Min: 0.4   Max: 2.28
Current: 1.85

0.4
2.28
Dividend Payout 0.28
FAF's Dividend Payout is ranked higher than
65% of the 127 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 0.25 vs. FAF: 0.28 )
FAF' s 10-Year Dividend Payout Range
Min: 0.13   Max: 0.33
Current: 0.28

0.13
0.33
Dividend growth (3y) 38.70
FAF's Dividend growth (3y) is ranked higher than
95% of the 110 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 8.70 vs. FAF: 38.70 )
FAF' s 10-Year Dividend growth (3y) Range
Min: 0   Max: 38.7
Current: 38.7

0
38.7
Yield on cost (5-Year) 1.80
FAF's Yield on cost (5-Year) is ranked lower than
72% of the 152 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 3.14 vs. FAF: 1.80 )
FAF' s 10-Year Yield on cost (5-Year) Range
Min: 0.4   Max: 2.28
Current: 1.8

0.4
2.28
Share Buyback Rate -0.90
FAF's Share Buyback Rate is ranked higher than
64% of the 148 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: -0.10 vs. FAF: -0.90 )
FAF' s 10-Year Share Buyback Rate Range
Min: 0   Max: -1.4
Current: -0.9

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 1.80
FAF's Price/Tangible Book is ranked higher than
51% of the 180 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 1.40 vs. FAF: 1.80 )
FAF' s 10-Year Price/Tangible Book Range
Min: 1.16   Max: 1.91
Current: 1.8

1.16
1.91
Price/Median PS Value 1.30
FAF's Price/Median PS Value is ranked higher than
55% of the 175 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 1.00 vs. FAF: 1.30 )
FAF' s 10-Year Price/Median PS Value Range
Min: 0.78   Max: 1.38
Current: 1.3

0.78
1.38
Price/Graham Number 1.10
FAF's Price/Graham Number is ranked higher than
57% of the 159 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 0.80 vs. FAF: 1.10 )
FAF' s 10-Year Price/Graham Number Range
Min: 0.82   Max: 1.16
Current: 1.1

0.82
1.16
Earnings Yield (Greenblatt) 10.10
FAF's Earnings Yield (Greenblatt) is ranked higher than
61% of the 184 Companies
in the Global Insurance - Property & Casualty industry.

( Industry Median: 10.40 vs. FAF: 10.10 )
FAF' s 10-Year Earnings Yield (Greenblatt) Range
Min: 8.6   Max: 20.4
Current: 10.1

8.6
20.4

Business Description

Industry: Insurance - Property & Casualty » Insurance - Property & Casualty
Compare: » details
Traded in other countries:Y1F.Germany
First American Financial Corporation was incorporated in the state of Delaware in January 2008 to serve as the holding company of The First American Corporation's financial services business. The Company is engaged in the business of providing financial services through its title insurance and services segment and its specialty insurance segment. The title insurance and services segment provides title insurance, escrow or closing services and similar or related financial services domestically and internationally in connection with residential and commercial real estate transactions. It also maintains, manages and provides access to title plant records and images and provides banking, trust and investment advisory services. It has two business segments ie The Company's title insurance and services segment issues title insurance policies on residential and commercial property and its specialty insurance segment issues property and casualty insurance policies and sells home warranty products.The substantial majority of its business is dependent upon activity in the real estate and mortgage markets, which are cyclical and seasonal. During the most recent real estate and mortgage cycle, it has primarily emphasized expense control and operational efficiency by, among other activities, reducing employee count, consolidating offices, centralizing agency and administrative functions, optimizing its organizational structure and rationalizing its brand strategy. There are various risks attached to its business ie Conditions in the real estate market generally impact the demand for a substantial portion of the Company's products and services, Unfavorable economic conditions may have a material adverse effect on the Company, Unfavorable economic or other conditions could cause the Company to write off a portion of its goodwill and other intangible assets, A downgrade by ratings agencies, reductions in statutory surplus maintained by the Company's title insurance underwriters or a deterioration in other measures of financial strength may negatively affect the Company's results of operations and competitive position, Failures at financial institutions at which the Company deposits funds could adversely affect the Company, Changes in government regulation could prohibit or limit the Company's operations or make it more burdensome to conduct such operations, Scrutiny of the Company's businesses and the industries in which it operates by governmental entities and others could adversely affect its operations and financial condition, Reform of government-sponsored enterprises could negatively impact the Company, Regulation of title insurance rates could adversely affect the Company's results of operations etc.

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