Additionally, title insurer, First American Financial Corporation (FAF, Financial) delivered another excellent quarter, highlighted by higher core title premium revenues resulting from record commercial and agency contributions. Despite a decline in refinancings, title margins were strong, earnings exceeded consensus expectations and FAF’s venture investment arm began to pay dividends. Management reiterated confidence in their outlook for the housing market and consistent with that view, stepped up share repurchase activity. Despite the stock’s recent strength, we believe investors are overly concerned about the impact of rising interest rates on the ongoing housing recovery and continue to underappreciate FAF’s scale, operating leverage and investment portfolio amidst the post-pandemic economy.
From John Rogers (Trades, Portfolio)' Ariel Fund fourth-quarter 2021 commentary.
