On May 13, 2014,
Fidelity National Financial, Inc.
) reached a new 52-week high of $34.78 after posting impressive
first-quarter 2014 earnings that included a positive earnings
surprise of 23.81%. With respect to earnings trend, this financial
services company delivered positive earnings surprises in all of
the last four quarters with an average beat of 14.19%
In fact, shares of Fidelity National climbed almost 7% to $34.43
per share since the company reported first-quarter results on April
30, 2014. Also, the year-to-date return of the stock is 6.09%, much
above the S&P 500's return of 2.66% as well as that of another
player in the industry,
First American Financial Corp.
) that generated a return of (2.23)% over the same period.
During the first quarter, Fidelity National's top line improved on
account of strong revenues by the Remy and FNFV units. Purchase
orders and margins also showed improvement during the quarter.
Moreover, book value increased, reflecting the company's decent
Fidelity National has successfully integrated Lender Processing
Services (LPS), which helped it to achieve cost synergies in the
first quarter and improved margins as well. Moreover, this
acquisition has enabled the company to raise its cost synergy
target for the upcoming period. Given these positives, Fidelity
National is expected to witness core business growth and margin
improvement going forward.
Although the near-term prospects of Fidelity National do not seem
promising enough, the long-term prospects remain impressive. The
Zacks Consensus Estimate for full-year 2014 has decreased 7.8% to
$1.88 since the company reported its first-quarter results owing to
the downward movement of estimates. This also translates into a
year-over-year decline of 13.13%.
However, over the same period, the Zacks Consensus Estimate for
full-year 2015 increased 1.2% to $2.45, also translating into a
year-over-year improvement of 29.97%. The expected long term growth
for the stock is 14.7%.
Fidelity National currently caries a Zacks Rank #3 (Hold).
However, better-ranked stocks in the financial services space that
are worth considering include
Allied World Assurance Company Holdings, AG
), First American Financial and
). While Allied World and First American sport a Zacks Rank #1
(Strong Buy), ACE carries a Zacks Rank #2 (Buy).
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FIDELITY NAT FI (FNF): Free Stock Analysis
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