Stewart Information Services Corp (STC)
The Company, through its subsidiaries, is primarily engaged in the title insurance-related services business. It also provides real estate information services.
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Beaten to a pulp, I'm looking for STC to bounce here off 10.30. Added it to the portfolio as well for a trade. g/l
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Current 10.30, Oct 8 09. Limit 10.04
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Following BravoBevo.
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Regardless of whether things get better in the real estate market in the next five years (and I think they will), properties will change hands. When properties change hands, people buy title insurance.
Their premiums are a function of market price, so higher prices help, but they do not have the same risk as buyers when prices go down. Also, selling title insurance is less susceptible to local risks in declining markets- they can sell policies where the markets are hot.
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Folks live in houses
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Steady business in flat housing cycle. When home starts pick back up, this one will be the crown jewel. Should have got in last month, but this will still rise in the near future.
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I guess I'm going to jump in at this price. Stewart is a quality company that will rebound ia a might way when things start turning around.
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Almost invested real money in this instead of IPHS. Want to track both of them to see how they do.
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Financial sector s--t has to work iits way through the whole goose!
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Low cost provider; moat because of network effect.
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As the Real Estate market picks up so will Stewart Information Holdings - it provides property title insurance .
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We know that foreclosures are escallating because of the rate resets on mortgages to owners that can't afford them.
After these foreclosure, SOMEONE's got to buy all those auctioned off houses, and those buyers are going to need title insurance. Why is this stock down so much?
Am I the only one that sees the sub-prime meltdown as being eventually good for the title insurance industry?
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mortgage title insurance
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Proposed by Good People
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Has done a lot of work with title automation, which should attract business outside of it's own title transactions.
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Tangible Book value of $32. Profits of $2-$4 /year. Promising new title automation software will reduce operating expenses and boost market share.
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I believe this small cap title insurer is going to outperform in the long haul. At around $35, this stock is trading at a 30% discount to intrinsic value. This estimate takes into account a housing recession that will cause FCF to fall to near zero, stay there for 2 years, and then recover to levels still well below 2001 levels. In my view, these estimates are very pessimistic and may not come to fruition. As mortgage rates rise, homeowners with variable rate loans will refinance which will mean purchasing new title insurance loans. Include the fact that the co-CEOs have a significant stake in the company, and I think STC is very likely to do well in the future.

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