10 Small–Cap Stocks Insiders Are Selling Recently

2. Skyward Specialty Insurance Group, Inc. (NASDAQ:SKWD)

Number of insiders selling: 9

Market capitalization: $1.969B

Skyward Specialty is an insurance company providing commercial property and casualty insurance products in the US. The offering includes general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers’ compensation insurance products.

Insider Monkey recently shared a Bull Case Theory for Skyward Specialty Insurance Group. In summary, the thesis argues that while natural disasters bring short-term risks, the company’s disciplined pricing and risk management should protect its capital in the long term. In 2023, many property and casualty insurers posted underwriting losses with a combined ratio of 101.5%, Skyward delivered a 90.7% ratio, showcasing its capability to drive consistent profits.

The company’s ability to navigate these challenges reinforces its long-term investment appeal. Valuation-wise, insurance companies are often assessed based on price-to-book ratios, with the industry averaging around 1x book value. Given Skyward’s profitability and book value per share growth of 23% annually over the past three years, a 2.5x price-to-book multiple is justified. Assuming book value continues to grow at a conservative 16% per year, Skyward’s stock could reach $107.23 by 2029, representing a 19% CAGR from current levels. With a strong management team, industry tailwinds, and disciplined execution, Skyward Specialty Insurance presents a compelling investment case with significant upside potential.

In January, nine insiders, among which is the company’s CEO sold around $2.34 million worth of Skyward Specialty shares at an average price of $47.57. The stock is now trading at $50.82 per share, having gone up 0.55% since the beginning of the year. Over the last 12 months, Skyward Specialty shares gained 56.32%.

The average rating on the stock from 10 analysts is “Buy,” while the 12-month stock price target is $53.0.