Shares of Stewart Information Services Corp. ( STC - Snapshot Report ) surged over 145% since November 2011 and hit a 52-week high on November 6, thanks to strong third quarter results late last month. With strong estimate revisions, this Zacks #1 Rank (Strong Buy) financial services stock has now become a solid momentum pick.

Another Progressive Quarter

On October 25, Stewart Information Services reported operating net earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 101.4% and last year’s earnings by 559%. Net income surged 7.7 times over the prior-year quarter to $34.7 million.

Total revenue rose 24.4% year over year to $520.7 million driven by growth across the board, while total expenses increased 17.2% year over year to $481.4 million. Yet, operating income advanced to $39.4 million from a mere $7.7 million in the year-ago period.

Subsequently, operating margin shored up to 7.6% from 1.8% in the year-ago quarter. Operating cash flow also jumped to $37.5 million from $1.6 million in the year-ago period. Solid growth was witnessed in both the real estate information and title insurance segments although investment income declined.

Stewart Information Services continues to benefit from the improving real estate market, particularly in existing home sales. As a result, refinance lending increased by over 55% in the reported quarter, driven by record low interest rates and a modified HARP program. Moreover, a declining trend in the title losses and claim payments bode well for the title insurance business.

Earnings Momentum on an Upswing

Following a strong third quarter, the Zacks Consensus Estimate for 2012 jumped 197.9% to $2.83 per share, as two of three estimates were revised upward over the last 30 days. This represents a year over year increase of 152.7%.

For 2013, the Zacks Consensus Estimate increased 69.0% to $2.67 over the last 30 days, supported by upward revisions from two of three estimates.

Charts Point to Upward Trend

Stewart Information Services hit a 52-week high of $24.52 on November 6 at the New York Stock Exchange, rising about 108% from the beginning of 2012, reflecting a bullish growth momentum for the rest of 2012.

Shares have been consistently trading close to its 52-week high and far above its 200-day moving average since August 2012, while it has fared well with respect to the 50-day moving average since early October 2012.

The stock has also outperformed the year-to-date S&P 500 index substantially, with an astounding year-to-date return of 110.04% compared to an S&P 500’s tally of 9.72%. Volume is fairly strong, averaging 207.3K daily.

Headquartered in Houston, Texas and founded in 1893, Stewart Information Services primarily offers financial products and services related to global title insurance and real estate information through direct operations and agency network. The company employs more than 5,600 professionals to serve customers in the U.S., Canada, Central America, Australia, Central Europe and the U.K. With a market capitalization of about $467 million, Stewart competes with First American Financial Corporation (FAF) and Fidelity National Financial Inc. (FNF), among others.

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