Because the new management team is plain stupid! This company is a cash cow that is ripe for a takeover and if they continue their stingly ways, the insiders may be able to "buy it out" with no cash outlay. FNFs market cap is currently 3.02B and their current cash on hand is 4.91B which means they have more available cash than the company is worth right now. So, for them to slash the dividend, citing buy-back and acquisitons as the reason, is really a poor management decision. Many reputable companies use the extra cas on hand to maintain their dividend through tough times but not these guys. They have someting up their sleeve and their primary objective is not to build shareholder value! Show me another company that has $21.76 cash on hand (per share) that is cutting their dividend. Hmm, maybe Stinson didn't like it either and that's why he is bailing!
I disagree with that. Fidelity benefits from high transaction volumes, not from high real estate pricing. Foreclosures are a good thing for them. Refinancings are good as well. Any stoppage on the foreclosures is short term, mainly about due process. It doesn't change the fact that the homeowner stopped paying and eventually will be foreclosed on.
They claim they don't have liability from the recent signature scandal since the actual ownership isn't in question. Again the signature scandal is mainly about process not questioning the fact of ownership.
Also wondering if Bill does not have something "up his sleeve." Not too long ago the quarterly dividend was raised from 15 cents to 18 cents per share and now it is going to be cut in half. Management had to know that such an announcement would tank the stock. Huge volume the past 2 days. Would like to know who the buyers were. Traditionally buying this stock below book value has been rewarding and I believe that anyone buying below $13 will end up with a decent return.
Seeking Alpha article came up with a discounted cash flow valuation of $22 per share. Would seem that this would be a good acquisition for any number of insurance companies. At $13 this has to be showing up on a lot of "value" screens.