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Kinsale Capital (KNSL) Up 21.4% in a Year: More Room to Run?
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Shares of Kinsale Capital (KNSL - Free Report) have gained 21.4% in a year, outperforming the industry's increase of 12.6%. The Zacks S&P 500 composite has rallied 12.2% in the said time frame. With a market capitalization of $4.7 billion, the average volume of shares traded in the last three months was 0.1 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher submissions, rate increases and effective capital deployment.
The property and casualty insurer has a decent earnings surprise history. The bottom line beat estimates in each of the last four quarters, the average being 32%.
Will the Bull Run Continue?
Estimates for 2022 and 2023 have moved up nearly 5.9% and 8.2%, respectively, in the past seven days, reflecting investors’ optimism.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $6.62 and $7.62, indicating a year-over-year increase of 15.3% and 15%, respectively.
Kinsale Capital’s premium income is expected to improve in the near term on the back of increasing submissions and rate increases.
The combination of highly controlled underwriting combined with advanced technology-driven low costs, and a focus on the Excess and Surplus Lines Insurance market is driving profitability and growth of Kinsale Capital.
The Excess and Surplus Lines insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market. The insurer’s trailing 12-month return on equity (ROE) was 20.6%, which expanded 590 basis points year over year. ROE reflects its efficiency in using shareholders’ funds.
Riding on economies of scale from premium expansion and management's focus on cost controlling measures, the expense ratio is likely to benefit. The metric improved 140 basis points in 2021.
By virtue of lower expense ratio, premium growth, continued rate increases from a strong underwriting environment and higher net favorable development of loss reserves from prior accident years, the underwriting income is expected to gain in the long run. In 2021, the metric surged more than two-fold year over year.
Banking on solid cash flow, this Zacks Rank #1 (Strong Buy) insurer has increased dividend since 2017 at a five-year CAGR (2016-2022) of 14.6%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze 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.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. In the past year, ACGL has rallied 28.3%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past 30 days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.53%. In the past year, WRB has rallied 26.4%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.7% and 1.7% north, respectively, in the past 30 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 22.4%.
The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 3.3% and 8.2% north, respectively, in the past seven days.
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Kinsale Capital (KNSL) Up 21.4% in a Year: More Room to Run?
Shares of Kinsale Capital (KNSL - Free Report) have gained 21.4% in a year, outperforming the industry's increase of 12.6%. The Zacks S&P 500 composite has rallied 12.2% in the said time frame. With a market capitalization of $4.7 billion, the average volume of shares traded in the last three months was 0.1 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher submissions, rate increases and effective capital deployment.
The property and casualty insurer has a decent earnings surprise history. The bottom line beat estimates in each of the last four quarters, the average being 32%.
Will the Bull Run Continue?
Estimates for 2022 and 2023 have moved up nearly 5.9% and 8.2%, respectively, in the past seven days, reflecting investors’ optimism.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $6.62 and $7.62, indicating a year-over-year increase of 15.3% and 15%, respectively.
Kinsale Capital’s premium income is expected to improve in the near term on the back of increasing submissions and rate increases.
The combination of highly controlled underwriting combined with advanced technology-driven low costs, and a focus on the Excess and Surplus Lines Insurance market is driving profitability and growth of Kinsale Capital.
The Excess and Surplus Lines insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
The insurer’s trailing 12-month return on equity (ROE) was 20.6%, which expanded 590 basis points year over year. ROE reflects its efficiency in using shareholders’ funds.
Riding on economies of scale from premium expansion and management's focus on cost controlling measures, the expense ratio is likely to benefit. The metric improved 140 basis points in 2021.
By virtue of lower expense ratio, premium growth, continued rate increases from a strong underwriting environment and higher net favorable development of loss reserves from prior accident years, the underwriting income is expected to gain in the long run. In 2021, the metric surged more than two-fold year over year.
Banking on solid cash flow, this Zacks Rank #1 (Strong Buy) insurer has increased dividend since 2017 at a five-year CAGR (2016-2022) of 14.6%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze 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.
Other Stocks to Consider
Some other top-ranked insurers include W.R. Berkley (WRB - Free Report) , Arch Capital Group (ACGL - Free Report) , and American Financial Group (AFG - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. In the past year, ACGL has rallied 28.3%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past 30 days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.53%. In the past year, WRB has rallied 26.4%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.7% and 1.7% north, respectively, in the past 30 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 22.4%.
The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 3.3% and 8.2% north, respectively, in the past seven days.