At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.
In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.
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|Company||Symbol||Industry||Stock Rating||YTD% Gain||S.T.
|First American Financial Corp||FAF||Property & Casualty Insurance||9.4||-1.25%||$23.05|
Why We Like The Stock:
First American Financial Corp (NYSE:FAF) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance). Like other Property & Casualty Insurance companies such as Fidelity National (NYSE:FNF), Old Republic Intl. (NYSE:ORI), and The Travelers Co. (NYSE:TRV), FAF is trending higher on an intermediate- and long-term basis. In early February, it crossed above its short-term moving averages (5-day, 10-day, and 50-day), which is a bullish sign. One of our favorite aspects of FAF as a buy at its current price is that it has a low correlation to the major indices. The market is currently overbought and has been violently selling off yesterday and this morning, so stocks with low correlations are a major plus when looking to trade during a volatile short-term correction. FAF has support around $24, and a short-term upside to ~$26. We like the stock as a short-term buy this week while the market pulls back.
We Would Be Buyers:
At the current price (~$24.70) or on a pullback to $24.
First American Financial Corporation, through its subsidiaries, is engaged in the business of providing financial services. The Company operates in two segments: title insurance and services and specialty insurance. The title insurance and services segment provides title insurance, closing and/or escrow services and similar or related services domestically and internationally in connection with residential and commercial real estate transactions. It also maintains, manages and provides access to title plant records and images and provides banking, trust and investment advisory services. The specialty insurance segment issues property and casualty insurance policies and sells home warranty products. In addition, its corporate function consists of certain financing facilities, as well as the corporate services that support its business operations.
Stock Rating: 9.4
The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.
First American Financial – Last Three Months
First American Financial – Last 12 Months
First American Financial – Last Five Years
At the time of publication the editor and affiliated companies own the following positions: None
Note: Positions may be bought or sold while this publication is in circulation without notice.