Fidelity National Financial Inc.’s ( FNF - Snapshot Report ) second quarter 2012 earnings surpassed the Zacks Consensus Estimate by 12.8%. This represents the third-straight quarter with a positive earnings surprise for this title insurance underwriter. With a price-to-book (P/B) ratio of just 1, this Zacks #1 Rank (Strong Buy) is a true value pick.

Strong Second Quarter Performance

On July 23, Fidelity National Financial delivered second quarter 2012 earnings of 53 cents per share, up 47.2% from the year-ago quarter. It was also 12.8% higher than the Zacks Consensus Estimate of 47 cents.

Total revenue increased 41.5% year over year to $1.7 billion. The improvement came on the back of higher title revenue (up 16% year over year) and contributions from the newly consolidated restaurant group.

Total expenses climbed 34.6% over the prior-year quarter, primarily due to increased personnel costs, operating expenses and other acquisition costs.

On July 30, the company’s board approved a share buyback program, wherein the company can repurchase 15 million shares over three years.

On June 25, Fidelity National Financial announced the acquisition of J. Alexander's Corporation (JAX). Subsequently, it will be integrated with American Blue Ribbon Holdings, Inc., the restaurant operating subsidiary of Fidelity National. The purchase consideration is valued at $78 million.

Positive Estimate Revisions

Over the last 30 days, the Zacks Consensus Estimate for 2012 rose 19.1% to $1.81 as all four estimates were revised upward. This also represents a year-over-year increase of 8.9%.

For 2013, three of four estimates moved upward in the same time frame, eventually lifting the Zacks Consensus Estimate by 7.5% to $1.44.

Attractive Valuation

Along with a P/B of 1.0, Fidelity National has a price-to-earnings (P/E) ratio of 10.2. (A P/B ratio under 3.0 and P/E ratio below 15.0 indicate value.)

Moreover, the company has 1-year return on equity (ROE) of 11.5%, higher than its peer group average of 7.1%.

Headquartered in Jacksonville, Florida, Fidelity National Financial offers title insurance, mortgage services and restaurant and other diversified services in the United States.

With a market capitalization of $4.08 billion and 18,000 employees, it competes with First American Financial Corporation (FAF), Old Republic International Corp. (ORI) and Stewart Information Services Corporation (STC), among others.