6. First American Financial ( FAF), spun-off of First American in June, is a title and specialty insurance company, based in California. After rising to the top of the title-insurance industry, with a leading market share, First American was recently eclipsed by Fidelity National, which purchased the title-operations of bankrupt LandAmerica. The title insurance business is dependent upon the real estate market because it is issued only upon the purchase or refinancing of property. First American executed rapid cost-saving in 2007 and 2008. Its business is now lean and mean and poised to grow in the coming years. However, a prolonged, depressed transaction level in the real estate market is the dominant risk to Morningstar's thesis and could keep the stock trading at a discount to its fair-value estimate of $26.