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Here's a Way to Play Real Estate Without Buying a House

Real Money's Paul Price has found an undervalued company that plays a key role in home transactions.
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Invest In Housing With This Industry Stock

So, the housing market continues to run hot. These days it’s more red-hot than the white-hot pandemic values, but property values continue to rise. That shouldn’t come as much of a surprise. In most areas, the pandemic did not create new issues so much as it accelerated trends already in motion.

Property values have climbed steadily since 2009. They fully recovered their post-2008 value within three years of the Great Recession and have doubled since 2011. All of which makes property a terrific investment right now. But how do you get in on that market if you aren’t interested in a 30 year mortgage?

Paul Price recommends looking at Fidelity National Financial (FNF). This company offers title insurance and mortgage-related services. That makes it a perfect company to reflect and profit off of rising housing prices without getting locked into a specific market.

“The company came public in mid-2014. It began trading at around $25 - $26 and posted 75 cents in earnings in that stub year," Price wrote recently on Real Money. "There has been great progress over the past six years across all major business metrics. Most notable since the end of 2015 were a near doubling in the dividend rate and an approximately 350% in EPS.

Price noted that "Continuous shareholders have made money, but nothing like what would have been expected considering FNF's growth in fundamentals. That embedded value creation suggests a nice ‘catch-up’ move higher awaits for buyers at today's very modest valuation.”

“Catch-up move” might be one of Price’s favorite phrases.

Frequent readers know that Price likes to focus his investing on overlooked assets. He searches for the stocks with low prices relative to the company’s fundamentals, then waits for the market to catch up. If other investors see what he sees, then he can sell to them. If not, he can wait for the near-inevitable dividends, buybacks or buyouts.

Like with Fidelity National Finance, a strong performer in a hot market at what Price considers to be a great value.

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