The recent announcement made by BTC Capital Management Inc. has caused quite a stir in the financial sector. As revealed in the company’s disclosure with the Securities and Exchange Commission (SEC), BTC Capital has decreased its holdings in shares of Fidelity National Financial, Inc. (NYSE:FNF) by a whopping 93.6% during the fourth quarter of last year.
While this news may seem shocking on the surface, it’s essential to dive deeper into its implications. According to the disclosure, BTC Capital sold 78,454 shares of Fidelity National Financial during Q4, leaving them with only 5,347 shares of the financial services provider’s stock at the end of that period.
BTC Capital Management Inc.’s holdings in Fidelity National Financial were worth $201,000 at the time of reporting their latest figures. Looking further into Fidelity National Financial itself, it is primarily engaged in providing title insurance and transaction services to the real estate and mortgage industries.
The recent earnings data for Fidelity National Financial paints an interesting picture as well. On February 22nd, they reported a significantly lower earnings per share than analysts had predicted at $1.06 per share compared to expectations of $1.28 per share- a difference of $0.22 per share.
Despite this fall below market predictions, Fidelity National Financial still managed an impressive return on equity figure of 22.52% and had a net margin of 9.83%. However, their revenue for Q4 was down by a colossal 46.8%, coming in at $2.55 billion compared to expected values northward of $2.98 billion.
While concerns may be raised over these revenue drops and BTC Capital Management’s significant divestment from their holdings in Fidelity National Financial stock; it is important to remember that many factors can cause such changes in market dynamics.
Right now, analysts predict that Fidelity may post earnings of 4.61 per share for the fiscal year. Despite this significant shift in market dynamics, the company still offers crucial services to both the real estate and mortgage industries; including escrow and other title-related services, trust activities amongst others.
Institutional Investors Show Growing Enthusiasm for Fidelity National Financial
Fidelity National Financial, a leading provider of title insurance and transaction services to the real estate and mortgage industries, has been attracting the interest of hedge funds and institutional investors in recent months. SG Americas Securities LLC increased its holdings in Fidelity National Financial by 8.5% during Q3 2016, whilst CIBC Asset Management Inc’s holdings grew by a staggering 85.9% during the same period. Iron Horse Wealth Management LLC also purchased shares in the company recently. These transactions show a growing enthusiasm for Fidelity National Financial’s business model, as well as its management team.
Institutions now own almost 78% of Fidelity National Financial, according to Bloomberg.com. The company has maintained steady growth over time and is reportedly still appealing to investors despite some analysts dropping their target price on shares from $47 to $45 recently. However, this view is not shared by all analysts with Credit Suisse Group maintaining an “outperform” rating and setting a $47.00 price target on shares.
Fidelity National Financial boasts several impressive metrics: it opened at $34.61 on Monday with a market cap of $9.42 billion; has a P/E ratio of 8.50; a beta of 1.34; and yields an annual dividend payout ratio of 44%. It also has a quick ratio of 0.20 and debt-to-equity ratio of 0.54 as well as sturdy support from its base in the form of trust activities and home warranty protections.
Fidelity National prides itself on its exceptional customer service which is why it is considered that they perform so well even when facing competition in their market sector which includes firms such as First American Title Insurance Co., Stewart Information Services Corp., Old Republic Title Insurance Co., Chicago Title Corp etc.
Overall, Fidelity National Financial’s solid fundamentals coupled with consistent shareholder returns makes it an attractive pick for potential hedge fund investors and institutions alike. It remains well positioned for future growth in a highly-competitive industry, making these investments not so much just an endorsement of the company’s present state but also its potential future success.