Kinsale Capital Group’s stock price has taken a beating over the past six months, shedding 22.7% of its value and falling to $308.85 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.
Following the pullback, is now the time to buy KNSL? Find out in our full research report, it’s free.
Why Are We Positive on Kinsale Capital Group?
Founded in 2009 during the aftermath of the financial crisis when many insurers were retreating from riskier markets, Kinsale Capital Group (NYSE: KNSL) is an insurance company that specializes in writing policies for hard-to-place, unusual, or high-risk businesses that standard insurers typically avoid.
1. Net Premiums Earned Skyrocket, Fueling Growth Opportunities
Insurers sell policies then use reinsurance (insurance for insurance companies) to protect themselves from large losses. Net premiums earned are therefore what's collected from selling policies less what’s paid to reinsurers as a risk mitigation tool.
Kinsale Capital Group’s net premiums earned has grown at a 18.8% annualized rate over the last two years, much better than the broader insurance industry.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Kinsale Capital Group’s EPS grew at 42.9% compounded annual growth rate over the last five years, higher than its 29.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Growing BVPS Reflects Strong Asset Base
We consider book value per share (BVPS) a critical metric for insurance companies. BVPS represents the total net worth per share, providing insight into a company’s financial strength and ability to meet policyholder obligations.
Kinsale Capital Group’s BVPS increased by 27.1% annually over the last five years, and growth has recently accelerated as BVPS grew at an incredible 30.2% annual clip over the past two years (from $50.31 to $85.31 per share).
Final Judgment
These are just a few reasons why Kinsale Capital Group is one of the best insurance companies out there. With the recent decline, the stock trades at 3.2× forward P/B (or $308.85 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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