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Kinsale (KNSL) Gains 33% in 6 Months: More Room for Upside?
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Shares of Kinsale Capital Group (KNSL - Free Report) have rallied 32.6% in the last six months against the industry’s decrease of 8.6% and the Finance sector’s decrease of 0.7%. The S&P 500 composite index has risen 8.9% in the said time frame. With a market capitalization of $4.9 billion, the average volume of shares traded in the last three months was 0.1 million.
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Continued focus on the E&S market, favorable combined ratio, lower expense ratio, growth in the investment portfolio and effective capital deployment continue to drive Kinsale, which beat earnings estimates in the last four quarters.
Kinsale’s return on equity ("ROE") for the trailing 12 months is 19.4%, comparing favorably with the industry’s 5.6%, reflecting the company’s efficiency in utilizing shareholders’ funds. This Zacks Rank #1 (Strong Buy) insurer targets to maintain operating ROE in the mid-teens range over a long term.
Can KNSL Stock Retain the Momentum?
The Zacks Consensus Estimate for 2021 and 2022 earnings indicates a year-over-year improvement of 69.9% and 17%, respectively. Kinsale has a favorable Growth Score of B. This style score analyzes the growth prospects of a company. Back-tested results have shown that stocks with a favorable Growth Score when combined with a solid Zacks Rank offer better returns.
Kinsale’s intensified focus on the E&S market across the United States poises it well to deliver margins and lower loss ratios. The insurer targets clients with small- and medium-sized accounts, which have better pricing and are less prone to competition. Kinsale estimates low double-digit rate increases across the book of business.
Kinsale remains well poised to benefit due to continued market dislocation as it has resulted in improved submission flows and better pricing decisions.
Though low-interest rates are likely to strain investment yields in the near term, investment of the excess operating funds is likely to result in a robust investment portfolio.
Boasting the best combination of high growth and low combined ratio among its peers, KNSL targets a combined ratio in the mid-80s range over the long term.
Kinsale has developed a proprietary technology platform, which is likely to provide a competitive edge over other industry players and support improved expenses ratio.
Banking on solid cash flow, Kinsale has increased dividends since 2017 at a five-year CAGR (2017-2021) of 12.9%.
Other Stocks to Consider
Some other top-ranked stocks from the same space include First American Financial (FAF - Free Report) , Fidelity National Financial (FNF - Free Report) and Cincinnati FinancialCorporation (CINF - Free Report) .
First American sports a Zacks Rank #1. The Zacks Consensus Estimate for 2021 earnings reflects a 22% year-over-year increase. First American delivered a four-quarter average earnings surprise of 29.19%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for 2021 and 2022 earnings of Fidelity National, sporting a Zacks Rank #1, has moved up 6.1% and 4.6% in the past seven days. Fidelity National delivered a four-quarter average earnings surprise of 38.18%.
Cincinnati Financial carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2021 earnings reflects a 64% year-over-year increase. Cincinnati Financial delivered a four-quarter average earnings surprise of 40.05%.
Shares of First American Financial, Fidelity National and Cincinnati Financial have gained 50.1%, 30.3% and 34.8%, respectively year to date.
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Kinsale (KNSL) Gains 33% in 6 Months: More Room for Upside?
Shares of Kinsale Capital Group (KNSL - Free Report) have rallied 32.6% in the last six months against the industry’s decrease of 8.6% and the Finance sector’s decrease of 0.7%. The S&P 500 composite index has risen 8.9% in the said time frame. With a market capitalization of $4.9 billion, the average volume of shares traded in the last three months was 0.1 million.
Continued focus on the E&S market, favorable combined ratio, lower expense ratio, growth in the investment portfolio and effective capital deployment continue to drive Kinsale, which beat earnings estimates in the last four quarters.
Kinsale’s return on equity ("ROE") for the trailing 12 months is 19.4%, comparing favorably with the industry’s 5.6%, reflecting the company’s efficiency in utilizing shareholders’ funds. This Zacks Rank #1 (Strong Buy) insurer targets to maintain operating ROE in the mid-teens range over a long term.
Can KNSL Stock Retain the Momentum?
The Zacks Consensus Estimate for 2021 and 2022 earnings indicates a year-over-year improvement of 69.9% and 17%, respectively. Kinsale has a favorable Growth Score of B. This style score analyzes the growth prospects of a company. Back-tested results have shown that stocks with a favorable Growth Score when combined with a solid Zacks Rank offer better returns.
Kinsale’s intensified focus on the E&S market across the United States poises it well to deliver margins and lower loss ratios. The insurer targets clients with small- and medium-sized accounts, which have better pricing and are less prone to competition. Kinsale estimates low double-digit rate increases across the book of business.
Kinsale remains well poised to benefit due to continued market dislocation as it has resulted in improved submission flows and better pricing decisions.
Though low-interest rates are likely to strain investment yields in the near term, investment of the excess operating funds is likely to result in a robust investment portfolio.
Boasting the best combination of high growth and low combined ratio among its peers, KNSL targets a combined ratio in the mid-80s range over the long term.
Kinsale has developed a proprietary technology platform, which is likely to provide a competitive edge over other industry players and support improved expenses ratio.
Banking on solid cash flow, Kinsale has increased dividends since 2017 at a five-year CAGR (2017-2021) of 12.9%.
Other Stocks to Consider
Some other top-ranked stocks from the same space include First American Financial (FAF - Free Report) , Fidelity National Financial (FNF - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) .
First American sports a Zacks Rank #1. The Zacks Consensus Estimate for 2021 earnings reflects a 22% year-over-year increase. First American delivered a four-quarter average earnings surprise of 29.19%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for 2021 and 2022 earnings of Fidelity National, sporting a Zacks Rank #1, has moved up 6.1% and 4.6% in the past seven days. Fidelity National delivered a four-quarter average earnings surprise of 38.18%.
Cincinnati Financial carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2021 earnings reflects a 64% year-over-year increase. Cincinnati Financial delivered a four-quarter average earnings surprise of 40.05%.
Shares of First American Financial, Fidelity National and Cincinnati Financial have gained 50.1%, 30.3% and 34.8%, respectively year to date.