Fidelity National Financial, Inc
) entered into an agreement to acquire America's leading employee
benefits platform Digital Insurance, Inc. (Digital).
Administering more than 20,000 employer clients and 250 broker
partnerships, Digital generates more than $1 billion in annual
premiums. It specializes in providing health insurance and
benefits management for small and medium sized business (SMB).
Digital is expected to generate nearly $50 million and $70
million in revenue by 2012 and 2013 respectively. Digital has
been successful in its operations in the SMB marketplace and also
has a robust organic growth prospect which we expect will brace
Fidelity National's growth portfolio amidst the changes taking
place in the industry.
The cash position of Fidelity National at the end of third
quarter of 2012 improved significantly owing to reduced claim
payments. We expect the solid liquidity to work as a backbone for
the company to undertake acquisitions and thereby expand its
Fidelity National has a consistent track record of acquisitions
and partnerships to strengthen its existing lines of businesses.
The last announcement in November, 2012 was about the partnership
of FNF Green, the environmental branch of Fidelity National, with
Ygrene Energy Fund, a company which provides clean energy finance
programs for local governments. The third quarter of 2012 also
saw a number of acquisitions by the company. In August Fidelity
National bought an additional 1.5 million shares from one of its
existing partners, Remy, thereby obtaining 51% stake in the
company. In October, 2012, Fidelity National completed its merger
with J. Alexander's.
There has been no earnings momentum in the last seven days. We
expect the estimates to move north over the optimism of the
recent acquisition. The Zacks Consensus estimates for the fourth
quarter and full year 2012 is pegged at 56 cents and $2.43
Stewart Information Services
), which closely competes with Fidelity National, has entered
into a partnership with the Canada based telecommunications
TELUS Financial Solutions
) in October, 2012 to function as the exclusive sales channel
offering mortgage instructing and reporting solutions to the
Fidelity National, which provides insurance, mortgage services,
restaurant and other diversified services currently holds a Zacks
#1 Rank, translating into a Strong Buy rating. Stewart
Information shares the same Zacks rank.
FIDELITY NAT FI (FNF): Free Stock Analysis
STEWART INFO SV (STC): Free Stock Analysis
TELUS CORP (TU): Free Stock Analysis Report
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