First American Financial, SANTA ANA
Nature of Business: Holding company of First American Title Insurance Co.
Total Employees: 7,000
In Orange County: 365
Stock Listing in The Times: On NASDAQ as “FAFnA” and “FAFnB”
Ticker Symbol*: “FAMRA” and “FAMRB”
Friday’s Close: A, $10.75; B, 11.25
One-Week Change: A, down $0.50; B, up $0.63
Analyst Review: “First American has a low profile because of its variable earnings--they bounce around quite a bit. And because of those low trading volumes, investment institutions haven’t been attracted to the stock. Its latest quarter shows a good rebound on earnings and we view it primarily as a asset-rich company. They have significant amounts of cash and investments compared to their book value. The asset base helps assure payment of dividends in spite of the volatility of earnings--it’s almost a 4% yield. This is a stock someone needs to buy and put away for three years and not look at it. It’s not one that’s going to jump up and perform real soon. I don’t know when the value of the company will be fully appreciated by the market. It’s attractive, but I don’t know if Wall Street will ever wake up to it, especially since the real estate market continues to be uncertain.”
--Mark Matheson, director of research
Cruttenden & Company, Irvine
SALES VS. PROFITS
Fiscal year ending Dec. 31 Dec. 31 Dec. 31 3 Qtrs. 3 Qtrs. 1988 1989 1990 1990 1991 Net Sales $643.9 $699.4 $707.8 $534.9 $536.6 Net Profit (Loss) $12.3 $13.5 $3.3 $2.9 $.65
Corporate Outlook: “First American is the second leading title insurer in the nation, and operates in all 50 states. It’s 102 years old. The company began in Orange County in 1889. We had a tremendous growth spurt that began in 1958. Our goal is to be first in our industry. Our most recent acquisition--TRTS Data Services Inc., a subsidiary of Westwood Equities--added to our existing tax service activities. We will be servicing some eight million contracts, making us the second largest tax service provider in the nation.”
--Jack H. Derloshon, chief financial officer
3-YEAR SUMMARY AND YEAR-TO-DATE: RETURN ON STOCKHOLDER INVESTMENT
Fiscal year ending Dec. 31 Dec. 31 Dec. 31 3 Qtrs. 3 Qtrs. 1988 1989 1990 1990 1991 52-Week High* $31.25 $35.00 $14.75 $17.75 $13.25 52-Week Low* $21.75 $11.00 $6.75 $ 7.88 $ 6.50 Book Value per Share $13.34 $14.75 $14.97 $14.99 $15.32 Net Earnings per Share* $1.25 $1.35 $0.33 $0.28 $0.07 Price-to-Earnings Ratio 24:1 9:1 22:1 25:1 122:1 Avg. Return on Investor Equity 9% 9% 2% 2% .5%**
* The company created a second class of common stock with limited voting privileges, B shares, in 1989. Investors were given one share of the new stock for each share they owned.
* * The company bought back 1.1 million shares of stock
Source: First American Financial Corp. For more information call or write, First American Financial Corp.: 114 E. Fifth St., Santa Ana, 92701. (714) 558-3211
