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First American Financial Corporation Message Board

  • woboci woboci Apr 11, 1999 11:09 AM Flag

    Q1 will likely be weak but....

    Given the nature of the title business, there is
    a lag between less title production and reducing
    payroll. Rising mortgage rates at the beginning of the
    year threw cold water on the refi business. Q1 EPS
    will likely be between 30 and 40 cents, significantly
    below the 46 cent Zacks consensus estimate. By Q2,
    following reduced personnel costs and hopefully still
    robust housing activity (new home and resale), FAF
    results should improve esp. as the mix shift from refis
    to new home and resale transactions (more profitable
    to FAF than refis) which helps margins.

    Who
    knows how the shares will react when lowball Q1 results
    come out. Given the crushing collapse in FAF's market
    cap, they might even rally (buy on bad news, sell on
    good). Longer term, assuming a good economy with strong
    job formation and continued low inflation, this
    company looks set to rock & roll as:

    1) It
    digitizes its title plants, boding well for title
    margins.
    2) Continues to grow its title top line by acquiring
    regional title firms, thus offsetting likely stagnant
    industry revenues.
    3) Continues to leverage its
    extraordinary distribution channel access to sell more and more
    higher-margin real estate information services as broad
    industry consolidation (esp. re lenders) continues. Here,
    it is important to remember that the business model
    is extremely attractive if volume gains can be
    achieved. The operating leverage of issuing more flood,
    appraisal, credit, etc. reports is very material as the cost
    structure tends to be fairly fixed given FAF's tremendous
    database and software investments. This business is
    perhaps somewhat comparable to selling software or TV
    programming; once the master tape has been made, variable
    costs associated with higher unit sales are quite
    small.
    4) Diversifies away from the cyclical RE industry at
    the margin by leveraging its growing databases in
    areas such as credit reporting, pre-employment
    screening, multifamily resident screening, automotive
    tracking, default, and loss mitigation.
    5) By virtue of
    having larger and larger earnings contribution from the
    information services side of the house, FAF will hopefully
    over time enjoy a higher multiple of earnings usually
    awarded document (analysis of records and production of
    reports) companies. In short, a P/E expansion combined
    with a resumption of consolidated earnings growth at a
    15% plus annual clip from an earnings power level of
    roughly $2.70 a share this year.

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    • <EOM>

    • compared to the lame idiots here. Jock has been sticking it in titan, and titan has been going down on jock. You know, same old story. Titan kissing up to jock like a little flunkie.

    • Muff_ie is me ! LOL G. C. was so nice ! All the
      fishes and corals told me to tell you hi and hurry back
      ! They all want EATME.CUM. Oh yeah by the way that
      chick also, remember ! Hahaha Not you HDLADY ! Drew,
      Jock Bhahahaha........ !

      Bye ! all and don't
      say you got me Jock, you biggest lier !

    • No way EATME.CUM, iTS looks more like
      Jockstootight gargyle in front of Motel 6 !
      Bhahahahahahaha........... So, I see you are still messing with message
      board leader JOCKSTOOLTiGHT ! Its not fun for me
      anylonger plus I made a big mistake buying this slow snail
      pase Company ! I really think FAF is on the way down
      again to fill that gap between $15.00 and $16.00 ! What
      do you think EATME.CUM ? No flunkies of
      Jockstooltight need answer my post !
      Especially mighty Titan,
      Opootimus, or thats right you too HDLADY, Hahahahahah
      !
      DOWN WITH THE UNDERVALUED AND ALL THE GARBAGES ON
      HERE, including Jockstooltight, the biggest kiss ass !

    • I recently found a site some of you might be interested in.
      I've made money three out of the past four weeks.
      http://www.inside-traders.com

    • she keeps scratching herself, that's why the
      fingers aren't typing.

      All FAF board readers and
      investors, please remember to thank jockette for causing the
      stock to go up on Monday. Jockettes great analysis and
      advisory commission with the FAF Senior Mgmt must have
      caused the stock to take a huge ump forward
      today.

      Thank you jockette...you and only you knew FAF was
      under-valued. Once you leaked the news like you do in your
      pants when you see your brother, you caused all these
      investors to take another look at the stock.

      Thank
      you all mighty jockette. My your strap be strong
      enough to carry your tons of bullsh_t.

    • changed handles. More research and great analysis
      that will definitely cause FAF to soar tomorrow. I bet
      jockette has her one day order to sell FAF at $30
      tomorrow.

      Hurry, jockette you herpes shank, change
      your handle and run like your mommy always taught you.


      After flying into OC today, I saw that FAF museum still
      conducting that snail construction. Parker must think he is
      building the Sistine Chapel or something. With one
      modification, the idiot jock as the head gargoyle.

    • I will look through the 10Q. Right now I think
      the 9.8M they reported plus 11M( 7.4M/(1-33.9%),
      before tax) = 20.8M. It is about even with year ago
      (20.9M).

      Any way, like the fundamental, bought at 17
      11/16.


      Good Luck to all longs.

      Bear,

    • RE: Its real-estate-info income has droped
      significantly while revenue has a slight increase. What is the
      story behind this?


      From 10Q:
      <<Real
      estate information pretax profits are generally
      unaffected by the type of real estate activity but increase
      as the volume of residential real estate loan
      transactions increase. As previously noted, real estate
      information pretax profits for the first quarter 1999 were
      adversely impacted by the change to the revenue recognition
      policy for tax service contracts.>>

      From
      Earnings Day News:
      <<Reported net income for the
      first quarter of 1999 was $24.9 million, or 40 cents
      per diluted share, and included the effects of a
      previously reported accounting change for the company's tax
      service contracts which became effective January 1, 1999,
      on a prospective basis. This accounting change
      resulted in a decrease of $7.4 million on an after-tax
      basis, or 12 cents per diluted share. Thus, earnings for
      the first quarter of 1999 would have been 52 cents
      under the former accounting rules. These comparable
      results exceeded the previous record-setting 1998 first
      quarter operating net income of $25.1 million, or 44
      cents per diluted share...>>

      Hope this
      helps, have a great Monday.

      H

    • but when I looked at its 1Q result, I have some
      question about its operation. Hope veterans on board will
      help to clarify.

      Its real-estate-info income
      has droped significantly while revenue has a slight
      increase. What is the story behind
      this?

      Bear,

      OPERATING REVENUES

      Title Insurance:

      Direct operations $260,323,000 $225,719,000
      Agency
      operations 260,661,000 176,536,000

      Real Estate
      Information 136,738,000 134,320,000


      Total
      operating revenues $695,545,000
      $568,802,000
      ------------------------------------------------------------------------------
      INCOME BEFORE INCOME TAXES
      AND MINORITY
      INTERESTS

      Title Insurance $35,161,000 30,261,000
      Real
      Estate Information 9,773,000 20,873,000

      Total
      before corporate expenses
      and minority interests
      54,164,000 58,178,000

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