We recently compiled a list of the HG Vora Capital Management’s Stock Picks For 2025. In this article, we are going to take a look at where First American Financial Corp (NYSE:FAF) stands against the other stocks.
HG Vora Capital Management was founded in 2009 as a hedge fund specializing in investing in event-driven, credit, and distressed special situations. The New York-based hedge fund has more than $5 billion in assets under management and reported more than $1.3 billion in securities in its latest 13F filing. While it is not positioning itself as an activist fund, HG Vora Capital has engaged with companies’ management on several occasions. As we go through some of HG Vora Capital’s stock picks, we will see some examples of the interactions that the fund had or is having with the companies it’s invested in.
Parag Vora, the founder of HG Vora, is a seasoned investor with decades of experience. Prior to founding HG Vora, Parag worked at Silver Point Capital, focusing on distressed assets and event-driven opportunities. Before Silver Point, Parag served as a Vice President in the Investment Banking Division at Goldman Sachs, advising real estate and consumer companies on M&A and leveraged financing.
HG Vora usually holds a relatively concentrated portfolio. However, over the last several years, the fund’s equity portfolio somewhat scaled down. At the end of 2021, HG Vora held 24 positions with a total value of $2.79 billion, according to its 13F filing for the period. It’s worth mentioning that such fluctuations in portfolio size can be observed during previous years as well. The reduced equity portfolio size could be attributed to a more attractive debt market driven by higher interest rates or other catalysts. During a panel at the Global Alts 2023 event, Parag said that it was “an amazing time to own safer first-lien debt where you can make equity-like returns.”
In its Q4 2024 13F filing, HG Vora Capital reported ownership in 10 companies as of the end of 2024. In a subsequent filing with the Securities and Exchange Commission, HG Vora disclosed closing its only healthcare bet – ModivCare Inc (NASDAQ:MODV), in which it had previously held 1.0 million shares.
Currently, most companies in HG Vora Capital’s 13F portfolio are operating in the resort and casino industry. Most holdings are long-term investments that Parag Vora’s fund has been bullish on for at least three years.
A modern office tower overlooking a city skyline, illustrating the power of its financial services division.
First American Financial Corporation (NYSE:FAF)
Shares held by HG Vora Capital Management: 3.345 million
Value of Position: $208.86 million
Last but not least, First American Financial Corporation (NYSE:FAF) is the only financial pick in HG Vora’s equity portfolio and it represents its largest holding. First American Financial Corporation (NYSE:FAF) provides title insurance and settlement services to real estate and mortgage businesses, operating in both commercial and residential markets. The company generates most of its revenue from the title insurance and services segment (for the fourth quarter, title insurance revenue was $1.61 billion versus total revenue of $1.69 billion) so its performance is negatively impacted by higher interest rates, which leads to fewer real estate transactions (title insurance is most commonly bought when a house is acquired through a mortgage deal or refinanced). Going forward provided the interest rates are expected to decline and the housing market continues to experience high demand, First American Financial Corporation (NYSE:FAF) is likely to see an increase in sales.
Overall FAF ranks 1st on our list of HG Vora Capital Management’s stock picks for 2025. While we acknowledge the potential of FAF as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FAF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
