We came across a bullish thesis on Kingstone Companies, Inc. (KINS) on The Fond Investor’s Substack by The Fond Investor. In this article, we will summarize the bulls’ thesis on KINS. Kingstone Companies, Inc.’s share was trading at $9.66 as of Oct 11th. KINS’s trailing and forward P/E were 21.87 and 8.20 respectively according to Yahoo Finance.
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Kingstone Companies, Inc. (KINS) is a regional property and casualty insurer specializing in coastal properties in the Northeast, particularly downstate New York. The company focuses primarily on personal insurance, including homeowners, renters, and personal umbrella policies, with expertise in high-value coastal properties.
Kingstone generates revenue through underwriting insurance policies and charging premiums, while managing risk exposure through effective pricing and reinsurance strategies. Its “Select” product line, launched in 2022, has helped improve pricing accuracy, reduce claims, and optimize profitability. Historically, Kingstone’s core market, especially in coastal New York, has provided strong underwriting results.
Investing in Kingstone offers a compelling opportunity. Despite past challenges—like its unsuccessful expansion into non-core markets and rising reinsurance costs—the company has executed a successful turnaround. Under new leadership, Kingstone has refocused on its core markets, improved pricing, and reduced its expense ratio from 41% to 31%, beating the industry average. Its combined ratio has dropped to an industry-leading 78, signaling strong underwriting profitability.
Kingstone is now in prime position to capitalize on a major market opportunity. With competitors like Adirondack, AmGUARD, and Mountain Valley exiting New York’s coastal property market, Kingstone can capture a significant share of the $260 million in available premiums. In July 2024 alone, the company saw a fivefold increase in new policies, underscoring the potential for rapid growth.
Financially, Kingstone trades at a heavily discounted valuation of 5x estimated 2025 earnings, with the stock currently priced around $9. The company’s earnings are expected to rise significantly, driven by its improved underwriting and pricing strategies. Kingstone’s projected EPS growth, coupled with the new market opportunities, could boost earnings by $0.35 by the end of 2025. With a price target of $17.50, representing nearly 100% upside, Kingstone presents an attractive investment, especially compared to peers operating in tougher markets like Florida. Kingstone’s strategic focus, coupled with its competitive position and strong financial metrics, makes it a solid investment choice for those seeking value in the property insurance sector.
Kingstone Companies, Inc. is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held KINS at the end of the second quarter which was 2 in the previous quarter. While we acknowledge the risk and potential of KINS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KINS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.