Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On May 28, 2013, shares of Fidelity National Financial, Inc. (FNF - Snapshot Report) hit a 52-week high of $27.17. The momentum was driven by the announcement to acquire Lender Processing Services, Inc. supported by first-quarter results, which included a 5% positive surprise.

Yesterday, Fidelity National announced its plans to acquire Lender Processing Services for a purchase consideration of $2.9 billion or $33.25 per share. Following the acquisition, the company will emerge as a primary provider of title insurance, mortgage technology and mortgage services in the U.S.

Additionally, Fidelity National expects the acquisition to generate cost synergies of more than $100 million as well as be accretive to future earnings. Moreover, adding Lender Processing Services to its portfolio will ensure a diversified as well as a recurring revenue base for Fidelity National.

Previously, on May 1, Fidelity National reported first-quarter 2013 earnings. Net operating earnings came in at 42 cents, up 31.2% year over year. Top line surged 72% year over year.

With respect to earnings trend, Fidelity National delivered positive earnings surprise in all the past 4 quarters with an average of 13.5%.

However, valuation for Fidelity National looks stretched. The shares are trading at a 6.5% premium to the peer group average on a forward price-to-earnings basis and at a 35.9% premium on a price-to-book basis. Return on equity is 27% higher than the peer group average. Nevertheless, the 1-year return from the stock came in at 37.4%, much above the S&P’s return of 26%.

Fidelity National carries a Zacks Rank # 2 (Buy). Property and casualty insurers like AXIS Capital Holdings Ltd. (AXS - Analyst Report) and Montpelier Re Holdings Ltd. (MRH - Analyst Report), among others, carry a favorable Zacks Rank #1 (Strong Buy) and appear impressive.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%