Homeowner’s Insurance Rates Skyrocketing: 10 Best Stocks To Buy

8. Fidelity National Financial, Inc. (NYSE:FNF)

Number of Hedge Fund Investors  in Q1 2024: 33

Fidelity National Financial, Inc. (NYSE:FNF) is another specialty insurance company that offers title insurance and home warranty products. While its business model is a bit more diversified because of the guaranty business, as a whole, Fidelity National Financial, Inc. (NYSE:FNF) continues to remain dependent on the health of the home building and mortgage industry. This means that any surprises on the earnings front will be heavily rewarded by investors as well. At the same time, due to the scale of its operations, Fidelity National Financial, Inc. (NYSE:FNF) relies on a large number of transactions to keep its margins low. If home inventory continues to remain low, then even if rates are low, the firm could struggle on the financial front unless it trims the belt and starts laying off employees. To help keep the shares stable, management could also announce stock repurchases that could create tailwinds for the shares.

Fidelity National Financial, Inc. (NYSE:FNF)’s guaranty business helps it weather any storm in the housing market. Here’s what management had to say about it during the Q1 2024 earnings call:

“F&G has profitably grown its assets under management before flow reinsurance to a record $58 billion at March 31. As demonstrated, F&G’s business performs well in a low rate environment and even better and higher rate environments, which provides a nice counterbalance for the title business. Their growth prospects are compelling and led to our board’s decision to invest $250 million in F&G during the first quarter, in exchange for a mandatory convertible preferred security. This will enable F&G to take advantage of the current opportunity to accelerate growth of its retained AUM. Overall, we are pleased with F&G’s performance, which continues to exceed our expectations and even more pleased that this performance is being recognized by the market as seen in F&G’s strong share price performance since its listing in December of 2022.

We believe that the growing value of F&G is beginning to be recognized in FNF’s shares as well. I would like to thank our employees for their outstanding efforts in delivering a solid start to the year, including another industry-leading performance despite the tough market.”