FAF stock: buy or sell?

FAF stock price: $65.01 -0.03% At close on February 21st, 2020

Updated on:
February 21st, 2020

4

First American remained stable -0.03% today to $65.01 after topping to all time highs on February/14. Friday was the third red session in a row, sliding in full a -1.18%.

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Specialty Insurance segments.

Should I buy FAF stock?

You can't be a successful trader if you don't follow a methodolgy or system that assist you in choosing companies and the correct market timing. That's why is so important to choose your own trading plan that matches with your character as inversor. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best.

Currently, First American stock doesn't match any of these trading strategies, so our recommendation is not to buy.

Buy setupElegible
New all-time highNo
New 52 week highNo
Price crossing up 200d MANo
100d MA crossing up 200d MANo
This doesn't mean FAF will fall in coming sessions, or it will not rise higher. Simply, it doesn't match our recommended trading systems.

Is First American stock a buy?

Financial institutions and banks publish stock ratings everyday. Unfortunately, we couldn't find any rating for FAF stock for the last month.

FAF stock analysis

Daily outlook

First American remained steady -0.03% today to $65.01 after reaching all time highs on Feb 14th.

First American remained stable -0.03% to $65.01 after topping to all time highs on February 14th. From a daily perspective, FAF is in a short term uptrend after plotting its last bottom ($60.32, on February/7) higher than the previous bottom, and its last top ($66.40, on Feb 14th) also over the previous top. Now trading in between its last bottom and last top FAF might consolidate in a plain range, waiting to break out over $66.40 or down under $60.32. On January 22nd FAF price bounced up over the SMA of 100 days demonstrating to be a significant support for this stock. On Feb/14, FAF hit new all time highs, pushing higher previous ATH of $65.45 recorded on February/13. New ATHs are usual entry points for many trading setups as there aren't higher resistences.

FAF stock chart (daily)

Weekly outlook

After boosting an extraordinary 6.98% in a week last week, First American closed this week at $65.01 and declined an ugly -0.73%.

First American stock is trading in the range of its last top and last bottom. Loosing would mean breaking the current uptrend. Breakdowns under last bottom are selling point signals for some trading strategies. Not so far away is the last price record First American marked last week. Since late April 2019 when SMA20w and SMA40w crossed up, FAF price gained $8.37 per share (14.78%). Since last week when FAF stock price broke up the SMA20w line, it gained $4.09 (6.71%).

FAF stock chart (weekly)

FAF stock price history

FAF stock went public on June 1st, 2010 with a price of $11.091. Since then, FAF stock grew a 486.20%, with a yearly average of 54.00%. If you had invested right after FAF's IPO a $1,000 in FAF stock in 2010, it would worth $4,862.00 today.

1: Adjusted price after possible price splits or reverse-splits.

FAF stock historical price chart

FAF stock reached all-time highs on Feb 14th with a price of $66.40.

FAF stock price target

Nobody can reliably foresee how stock prices may evolve in the future. However, banks and other financial institutions analysts, with the help of lots of data and algorithms do their best to predict the stock prices movement. The accuracy of these stock price predictions is not very high, and you should not blindly believe and make decisions only based on what this ratings or price target predictions say. For the last 30 days we have not detected any price prediction for First American stock by any trusted analyst.

Financials and fundamental analysis

Earnings date and Earnings per Share

Since April, when First American published its last earnings report, it . As soon as we get its actual EPS from the earnings report, we will extend this review.
FAF earnings date and EPS evolution
QuarterReporting dateEstimated EPSActual EPSSurprise
2017-Q2-n/a1.09n/a
2017-Q32017-10-2611.055.0%
2017-Q42018-02-080.920.953.3%
2018-Q12018-04-260.650.719.2%
2018-Q22018-07-261.241.337.3%
2018-Q32018-10-251.291.30.8%
2018-Q42019-02-141.141.2711.4%
2019-Q12019-04-250.68n/an/a
2019-Q2-n/an/an/a
2019-Q3-n/an/an/a

Annual financial results

Compared to 2017, last anual turnover report draw a tight move of -0.42% to $5,747.84 M USD. Aligned with this, its earnings margin (compared to revenues) stayed steady to 8.26%, that is $474.50 million.

To have an updated view of the financial situation of First American, we have calculated the trailing twelve month (TTM) sales and income figures. TTM values are the sum of the last 4 quarters and aproximate to an annual fiscal report ending in 2019-Q1 that can be compared to 2018 fiscal year results. Annual First American TTM sales up to March 2019 were $5,754.04 and income was $507.84 M dollars. When comparing this TTM figures with the last reported annuality, we can review First American business evolution since December 2018: Annual sales up to March, compared to lastest yearly report, remained constant a tight 0.11%. Regarding profit margin, First American remained stable 0.57% to 8.26%

FAF annual Sales and Income evolution
YearSalesYoYIncome/(margin)YoY
2013$4,960 M-$186 M3.8%-
2014$4,678 M-5.69%$234 M5.0%25.53%
2015$5,175 M10.64%$288 M5.6%23.36%
2016$5,576 M7.74%$343 M6.2%19.06%
2017$5,772 M3.52%$423 M7.3%23.34%
2018$5,748 M-0.42%$474 M8.3%12.16%
TTM $5,754 M0.11%$508 M8.8%7.03%

Quarterly financial results

First American reported $1,303.58 M in revenues for 2019-Q1, a -8.01% less compared to previous quarter. Reported quarter earnings marked $109.58 M with a profit margin of 8.41%. Profit margin grew a 1.94% compared to previous quarter when profit margin was 6.47%. When comparing revenues to same quarter last year, First American sales marked a neutral movement and stayed steady a 0.48%. Looking back to recent quarterly results, First American posted 2 positive quarters in a row.
FAF quarterly Sales and Income evolution
QuarterSales1QoQ2Income1/(margin)QoQ2
2017-Q2$1,450 M-$122 M8.4%-
2017-Q3$1,520 M4.83%$21 M1.4%-82.51%
2017-Q4$1,481 M-2.54%$221 M14.9%934.27%
2018-Q1$1,297 M-12.42%$76 M5.9%-65.53%
2018-Q2$1,491 M14.94%$155 M10.4%103.52%
2018-Q3$1,542 M3.42%$151 M9.8%-2.36%
2018-Q4$1,417 M-8.11%$92 M6.5%-39.50%
2019-Q1$1,304 M-8.01%$110 M8.4%19.56%

First American ownership

When you are planning to invest in a company, it's always worth to have a look its ownership structure.

First American shares owned by insiders (that is, founders, CEO, CTO, main executives or other management staff) currently counts a 2.88% of all shares.

Bearish positions for FAF stock account 0.00%, no big difference from last month.

For a better context understanding, the next table shows ownership data compared to other related stocks:

FAF
Market cap$7.3 B
Total shares112.3 M
Float shares108.8 M
  - Institutional holdings (%)86.0%
  - Insider holdings (%)2.9%
Shares in short selling0.0%

FAF summary

Friday, February 21st, 2020
Open$65.05
Close$65.01
Day range$64.62 - $65.42
Previous close$65.03
Session gain-0.03%
Average true range$1.20
50d mov avg$60.89
100d mov avg$61.00
200d mov avg$58.09
Daily patternlt06a
Weekly pattern lt06a

First American performance

To measure stock performance is always good to benchmark with competitors or related stocks. We picked as the bechmarking frame for First American stock.
Stock3m6m12m
FAFFirst American4.52%14.29%29.81%

First American competitors

Unfortunately, we could not find any public company that could be defined as First American competitor. This doesn't mean First American does not have any competitor in the market, it's just we could not detected it.