STC Should I Buy
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STC is not a good buy right now for an impatient investor. Despite improving fundamentals and a fresh analyst upgrade with ~$81 upside, the technical trend is still bearish (price capped by longer-term averages) and near-term pattern stats lean slightly negative into earnings. I would hold off on buying until STC clears ~69.20 resistance with strength; at the current ~67.4 level, the risk/reward is not compelling for an immediate entry.
Price/Trend: Mixed-to-bearish. Moving averages are stacked bearishly (SMA_200 > SMA_20 > SMA_5), suggesting the dominant trend is still down/weak despite a short-term stabilization. Momentum: MACD histogram is positive and expanding (0.277), signaling improving momentum, but RSI(6) ~49 is neutral—no strong bullish thrust yet. Levels: Pivot ~67.19 (price is only slightly above). Near resistance at R1 ~69.19; a breakout above this level would improve the technical setup. Supports: S1 ~65.18 then S2 ~63.94. Quant pattern read-through: Similar-candlestick projection shows ~50% odds of a small decline next day (-0.32% expected), and a mild negative bias over the next week (-1.4%), implying limited edge for buying immediately.
Earnings catalyst: Q4 and FY2025 earnings on Feb 4 (after hours) with a Feb 5 call—could drive a re-rating if results/guidance confirm momentum.
Analyst sentiment improved: Keefe Bruyette upgraded STC to Outperform with an $81 target (valuation-driven after underperformance), which can attract incremental buyers.
Fundamentals trend positive: Latest reported quarter (2025/Q
showed strong YoY growth in revenue, net income, and EPS, supporting the bull case if it persists into Q
Macro tailwind possibility: If mortgage rates move lower, title activity could benefit (even if policy efforts focus on reducing closing costs).
Technical overhang: Bearish moving-average structure suggests rallies may fade until STC reclaims key levels (notably ~69.2 and then higher).
Event risk: Earnings are imminent; with elevated IV, the stock is positioned for a meaningful move—unfavorable results/guidance could push it toward ~65 or lower quickly.
Policy/industry risk: Potential initiatives aimed at reducing closing costs could pressure economics for title insurers (noted in analyst commentary).
Weak near-term statistical edge: The provided pattern-based forward view tilts slightly negative over the next week.
Latest quarter: 2025/Q3. Growth trends were strong: Revenue $792.6M (+19.46% YoY), Net Income $44.26M (+47.06% YoY), EPS $1.55 (+44.86% YoY). This is a clear acceleration in profitability relative to revenue growth, a positive quality signal going into Q4. (Gross margin listed as 0 appears to be a data artifact rather than a meaningful metric.)
Recent trend: Keefe Bruyette moved from Market Perform (with a raised PT to $81 from $78 on 2025-12-18) to an Outperform upgrade on 2026-01-26 while keeping the $81 target. Wall Street pros/cons view (from provided notes): Pros: Valuation now attractive after underperformance; expectation of solid Q4 results; lower mortgage rates could help title insurers via improved transaction volumes. Cons: Potential policy-driven changes to reduce closing costs could be a headwind to title insurers; the group has lagged mortgage originators in the current narrative. Influential/flow check: Hedge funds neutral (no significant last-quarter trend). Insiders neutral (no significant last-month trend). No recent Congress trading data in the last 90 days.
