What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Asset Management company Artisan Partners (NYSE: APAM) jumped 3.4%. Is now the time to buy Artisan Partners? Access our full analysis report here, it’s free.
- Payment Processing company Shift4 (NYSE: FOUR) jumped 3.1%. Is now the time to buy Shift4? Access our full analysis report here, it’s free.
- Property & Casualty Insurance company First American Financial (NYSE: FAF) jumped 3.5%. Is now the time to buy First American Financial? Access our full analysis report here, it’s free.
- Property & Casualty Insurance company Fidelity National Financial (NYSE: FNF) jumped 3.1%. Is now the time to buy Fidelity National Financial? Access our full analysis report here, it’s free.
- Thrifts & Mortgage Finance company TFS Financial (NASDAQ: TFSL) jumped 3.5%. Is now the time to buy TFS Financial? Access our full analysis report here, it’s free.
Zooming In On First American Financial (FAF)
First American Financial’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 3.9% on the news that Barclays analyst Terry Ma lowered the firm's price target on the stock. The new price target for the title insurance and settlement services provider was set at $70.00, down from a previous target of $72.00, representing a 2.78% decrease. Despite the lowered price target, the analyst maintained an "Equal-Weight" rating on the shares.
First American Financial is up 8.2% since the beginning of the year, and at $66.98 per share, it is trading close to its 52-week high of $70.63 from November 2024. Investors who bought $1,000 worth of First American Financial’s shares 5 years ago would now be looking at an investment worth $1,276.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
