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1. Company Snapshot

1.a. Company Description

Investors Title Company, through its subsidiaries, engages in the issuance of residential and commercial title insurance for residential, institutional, commercial, and industrial properties.The company underwrites land title insurance for owners and mortgagees as a primary insurer; and assumes the reinsurance of title insurance risks from other title insurance companies.It also provides services in connection with tax-deferred exchanges of like-kind property; acts as a qualified intermediary in tax-deferred exchanges of property; coordinates the exchange aspects of the real estate transaction, such as drafting standard exchange documents, holding the exchange funds between the sale of the old property and the purchase of the new property, and accepting the formal identification of the replacement property.


In addition, it serves as an exchange accommodation titleholder for accomplishing reverse exchanges when the taxpayers decide to acquire replacement property before selling the relinquished property.Further, the company offers investment management and trust services to individuals, companies, banks, and trusts; and consulting and management services to clients to start and operate a title insurance agency.It issues title insurance policies primarily through approved attorneys from underwriting offices, as well as through independent issuing agents in 24 states and the District of Columbia, primarily in the eastern half of the United States.


The company was founded in 1972 and is headquartered in Chapel Hill, North Carolina.

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1.b. Last Insights on ITIC

Investors Title Company's recent performance was negatively impacted by a 30% year-over-year drop in earnings per share due to investment losses and rising costs. The company's Q1 results showed a decline in net income to $3.2 million, or $1.67 per diluted share, compared to $4.5 million, or $2.40 per diluted share, in the prior year period. Despite a 5.8% increase in revenues to $56.6 million, primarily driven by a 15.3% rise in net premiums written, the company's profit margins were squeezed by escalating agent commissions and investment losses.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Market Today: Crypto Rout, Omnicom Cuts, Nvidia--Synopsys Deal

Dec -01

Source: gurufocus.com

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First Look: Airbus drops, Crypto slides, Cyber Monday

Dec -01

Source: gurufocus.com

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HCI Group (NYSE:HCI) versus Investors Title (NASDAQ:ITIC) Financial Review

Nov -29

Source: defenseworld.net

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Investors Title (NASDAQ:ITIC) versus American Coastal Insurance (NASDAQ:ACIC) Head-To-Head Review

Nov -22

Source: defenseworld.net

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Investors Title Company: A Lower Than Expected Special Dividend

Nov -18

Source: seekingalpha.com

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Roadzen (NASDAQ:RDZN) vs. Investors Title (NASDAQ:ITIC) Head to Head Survey

Nov -17

Source: defenseworld.net

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Third Avenue Management Exits Deutsche Bank AG, Impacting Portfolio by -6.22%

Nov -14

Source: gurufocus.com

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ITIC Q3 Earnings Rise Y/Y on Strong Real Estate Activity, Stock Up 5%

Nov -11

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.55%)

6. Segments

Title Insurance

Expected Growth: 4.5%

The title insurance market is driven by increasing demand for secure property ownership, growth in the real estate industry, and rising need for protection against title defects. Additionally, the adoption of digital technologies and increasing awareness about the importance of title insurance are expected to fuel market growth.

Intersegment Eliminations

Expected Growth: 4.5%

The elimination of intersegment transactions ensures accurate financial reporting, driving growth. Increased consolidation and M&A activities, coupled with regulatory requirements, fuel demand for intersegment eliminations, resulting in a forecasted CAGR of 4.5%.

Exchange Services

Expected Growth: 5.5%

Growing demand for tax-deferred exchange services, increasing awareness of 1031 exchanges, and expanding investor appetite for optimized investment strategies drive growth in the exchange services segment.

All Other

Expected Growth: 4.5%

The residual category of revenue streams, including fees from tax-deferred exchanges and other miscellaneous services, is expected to grow steadily driven by increasing demand for title insurance and settlement services, expansion of Investors Title Company's service offerings, and a growing real estate market.

7. Detailed Products

Title Insurance

Protects lenders and homeowners from title defects and liens, ensuring a clear property title.

Escrow and Closing Services

Facilitates the closing process, holding and disbursing funds, and preparing documents.

1031 Exchange Services

Assists with tax-deferred exchanges of like-kind properties, providing guidance and documentation.

Construction Disbursing Services

Manages and disburses funds for construction projects, ensuring timely and secure payments.

Settlement Services

Provides comprehensive settlement solutions, including document preparation and notarization.

8. Investors Title Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Investors Title Company is moderate due to the presence of alternative title insurance providers.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of concentration of buyers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers of title insurance services.

Threat Of New Entrants

The threat of new entrants is high due to the relatively low barriers to entry in the title insurance industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors in the title insurance market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.39%
Debt Cost 3.95%
Equity Weight 96.61%
Equity Cost 7.89%
WACC 7.76%
Leverage 3.51%

11. Quality Control: Investors Title Company passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Investors Title

A-Score: 6.9/10

Value: 5.0

Growth: 4.7

Quality: 7.9

Yield: 10.0

Momentum: 7.0

Volatility: 6.7

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Employers Holdings

A-Score: 6.0/10

Value: 6.9

Growth: 4.9

Quality: 6.2

Yield: 7.0

Momentum: 2.5

Volatility: 8.7

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Tiptree

A-Score: 5.9/10

Value: 8.1

Growth: 7.7

Quality: 6.9

Yield: 4.0

Momentum: 4.0

Volatility: 5.0

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AMERISAFE

A-Score: 5.6/10

Value: 3.5

Growth: 2.2

Quality: 7.0

Yield: 10.0

Momentum: 2.0

Volatility: 9.0

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MBIA

A-Score: 5.3/10

Value: 8.6

Growth: 1.3

Quality: 5.2

Yield: 5.0

Momentum: 9.5

Volatility: 2.0

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ICC Holdings

A-Score: 4.8/10

Value: 4.9

Growth: 7.3

Quality: 5.1

Yield: 0.0

Momentum: 5.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

250.45$

Current Price

250.45$

Potential

-0.00%

Expected Cash-Flows