Stewart Information Services Corp (NYSE:STC)

CAPS Rating: 4 out of 5

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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Recs

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Member Avatar rich426 (< 20) Submitted: 4/18/2007 6:00:54 AM : Outperform Start Price: $40.26 STC Score: -61.84

Has done a lot of work with title automation, which should attract business outside of it's own title transactions.

Recs

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Member Avatar esebeus (48.41) Submitted: 12/28/2006 9:11:39 PM : Outperform Start Price: $41.58 STC Score: -66.34

Tangible Book value of $32. Profits of $2-$4 /year. Promising new title automation software will reduce operating expenses and boost market share.

Recs

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Member Avatar lecourasa (< 20) Submitted: 9/18/2006 4:59:35 PM : Outperform Start Price: $33.94 STC Score: -66.41

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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