NYSE (KNSL)
A Roots Research Publication Q4 2022
As of 4/16/2023
DISCLAIMER
T his is an informative publication. Your financial decisions and their risks are your own. The information presented here on this website, subsequent posts, discussions or social media engagements or any other form is not financial advice. Investment decisions made based upon any content; generated, referenced, or hosted herein are done so explicitly by the investor without any individual guidance from Roots Research, LLC. Those decisions and their consequences, in whole or in part, are the sole responsibility of the investor. Any content, comments, references, or external sources involved that create any ambiguity as to their intent shall be viewed solely as analytic in nature and wholly consisting of disinterested commentary. At no point shall statements, charts, comments, quantity of discussion, or social media activity be misconstrued for recommendations or advice in financial choices. You should not treat any opinion expressed by Roots Research LLC or it’s members as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their opinion. Roots Research LLC statements and opinions are subject to change without notice. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investing is risky and you may lose the total sum or more of your investment. Investments or strategies mentioned by Roots Research LLC may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser. Some information in this publication is from cited sources be sure to check original data or your own research if you have any concerns about the information given here. Redistribution or replication of this publication is strictly forbidden without the express written consent of Roots Research LLC.
WHY WE ARE TALKING ABOUT THIS STOCK
Underwriting Property Insurance When writing property insurance, Kinsale purchases reinsurance to mitigate their risk to large property insurance losses. Effective June 1, 2022, the Company purchased coverage of $75.0 million per event in excess of their $25.0 million retention, with a maximum aggregate loss recovery limit of $150 million.
● Kinsale Capital Group (NYSE: KNSL) is a specialty insurance company exclusively focused on the excess and surplus (E&S) markets in the United States, with an average premium policy in 2022 of $12,400. ● The Company will report Q1FY23 financial results after the close of market on Thursday, April 27, 2023 with a company conference call scheduled for the following morning, Friday, April 28, 2023 at 9:00 a.m. (EST). ● Kinsale Capital reported an average net loss and loss adjustment expense ratio of 57.7% in 2022, compared to A.M. Best Company's domestic professional surplus lines composite average from 2001 to 2021 of 69.5%. ● Return on equity and combined ratios were 22.0% and 77.9%, respectively, for the year ended December 31, 2022.
Kinsale Capital currently returns capital to shareholders in the form of quarterly cash dividends. The Company does not have any ongoing share repurchase programs.
Industry
Sector
Insurance - Property & Casualty
Financial Services
● SHARES OUTSTANDING: ○ 23,096,966 ● LOCATION: ○ Richmond, Virgina ● MISSION STATEMENT FROM PROSPECTUS: ○ ABOUT THE COMPANY
Our goal is to deliver long-term value for our shareholders by growing our business and generating attractive returns
● SOURCES OF REVENUE:
○ Premiums: Commercial, and Personal
● YEARS IN OPERATION: ○ Founded in 2009 ● THINGS TO NOTE: ○ The maximum amount of dividends the wholly-owned subsidiary, Kinsale Insurance, could pay Kinsale Capital Group during 2023 without regulatory approval is $153.3 million ○ There were no cash dividends paid to Kinsale Capital Group by Kinsale Insurance for the years ended December 31, 2020 or 2022. The subsidiary paid $8.0 million for the year ended December 31, 2021
*Based on common publicly traded share class (NYSE: KNSL)
KEY POINTS
Item 1
The Roots
Company Metrics
Inside Ownership
Short Interest
Institutional Shares
Item 3
Return of Equity amounting to 22% for FY2022 $1.1 Billion underwritten in policies in 2022
Market Cap:
$7.21B 0.18%
27,344,030 Shares
611,897 Shares
957,800 Current Shares Short
Dividend:
Beta:
0.87
Item 2
118.09% Overall*
2.64% Overall
4.39% Overall
PE Ratio:
45.26
Increasing dividends on a consistent basis
* total ownership may exceed 100% due to derivative use and or multiple share classes
KNSL Monthly Chart
Rapid growth since its IPO* has been accelerated by additional Volume* inflow post-COVID. Recent new highs are the completion of a Cup & Handle* Pattern*. Typically following one Pattern completion, price action consolidates or falls to the last Support* level. In this case the 20EMA* has served as and overall guide point for growth.
* Link to the definition of pattern
KNSL Weekly Chart
The Hammer* printed this week, under Resistance*, suggests a reversal from the last month's growth. This is in keeping with the consolidation range seen on the monthly chart. Post-earnings drops in pricing have also been consistent since May '22, further reinforcing this Candle's* indication. Returning to that Trend* will likely see pricing below $300 before a retest of this same Resistance at $320. A repeated rejection, that then fails the Trend, could build an Adam & Eve* sending trading under $250. A breakout over $320 maintains the last year's cyclical growth toward $369.
* Link to the definition of pattern
PREVIOUS MARKET SENTIMENT / REACTIONS
OPENING PRICE
HIGH OF DAY
LOW OF DAY
CLOSING PRICE
TRADING VOLUME
DATE
EVENT*
Kinsale Capital Group Announces First Quarter 2023 Earnings Release Date
04/05/2023
$294.76
$300.51
$293.84
$300.37
121K
03/06/2023
$316.99
$320.11
$312.62
$320.10
158K
Kinsale Announces Promotions
02/16/2023
$296.96
$299.34
$292.01
$292.01
178K
Reports 2022 Fourth Quarter and Year-End Results
12/16/2022
$268.62
$278.15
$267.43
$276.46
304K
Announces Acquisition of Real Estate in Richmond, Virginia
Fairly clean social media feed, intraday volume has been trending down (low volume favors slightly positive price action due to fewer sells) as long as there is not a large catalyst in the market it could continue upwards. A large influx of volume with a price trending down, would signal a reversal in the stock. In other words, no news is good news. ● In the 3 trading days prior to 04/05/2023, price movement was overall sideways . In the three trading days after, price movement went upwards . ● In the 3 trading days prior to 03/06/2023, price movement was overall sideways . In the three trading days after, price movement went downwards . ● In the 3 trading days prior to 02/16/2023, price movement was overall sideways . In the three trading days after, price movement went upwards . ● In the 3 trading days prior to 12/16/2022, price movement was overall downwards . In the three trading days after, price movement went sideways .
*Events have a hyperlink for information specific to that day
Earnings Report for FY22*
December 31, 2021 December 31, 2022
Items to Note Items to Note Net income increased by 39.2% compared to the fourth quarter of 2021. Net operating earnings of $60.3 million increased by 48.1% compared to the fourth quarter of 2021. ● Thing 1 ● Net income increased by 4.2% compared to the full year of 2021. Net operating earnings of $180.4 million increased by 36.2% Thing 2 compared to the full year of 2021. Gross written premiums increased by 44.2% to $1.1 billion compared to the full year of 2021. The Company's investment portfolio had a gross investment return of 3.0% for the year ended December 31, 2022, compared to 2.5% for the year ended December 31, 2021. The cash and invested assets totaled $2.2 billion at December 31, 2022, compared to $1.7 billion at December 31, 2021.
ASSETS Cash and cash equivalents
1,685,717 1,564,677 2,025,655
2,186,569 2,030,295 2,747,122
Total Investments
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
23,250
31,361
Deployment
Total current liabilities
2,001,673
1,326,320
Total revenues
639,779
819,200
COST AND EXPENSES Research and development
N/A 669
N/A 721
Other
Total cost and expenses Loss from operations
450,978 324,415 152,659
623,636 457,913 159,114
Net Income
NET LOSS/GAIN PER SHARE Diluted net (loss)/gain per share
$6.73
$6.97
WEIGHTED AVERAGE SHARES USED IN CALCULATING: Basic net loss/gain per share
22,693,000 23,062,000
22,815,000 23,125,000
Diluted net loss/gain per share
*Link to the company's most recent 10-Q Form. Amounts in thousands except per-share data.
INSIDER TRADING
KNSL's leadership does have a consistent history of selling their own shares, however due to the low amount of insider percentage and outstanding shares, this is typically not seen as a threat for sudden drops in the stocks price. (Stock option award sales are a standard way of rewarding company insiders)
Shares Outstanding: 23,096,966
Insider Shares: 611,897
Insider Ownership: 2.64%
Insiders are a company's officers, directors, relatives, or anyone else with access to key company information before it's made available to the public. Insider Trading refers to these people and their purchases, sales or exercise of options contracts.
INSTITUTIONAL OWNERSHIP Institutional Owners*: 840;
with 828 Long, 7 Short, 5 Long & Short Shares Outstanding: 23,097,000 Institutional Shares: 27,346,290 - 118% Institutional Value: 8.51 Billion
Top 3 Institutional Owners: 2,473,610 Vanguard Group Inc: 2,206,845 Bamco Inc /ny/ : 2,077,065 BlackRock Inc.:
*Institutional ownership is the amount of stock owned by large entities that manage funds on behalf of others. Stocks with a large amount of institutional ownership are often looked upon favorably. Shares outstanding are the total amount of shares issued by the company
SHORT INTERES T Latest Market Date: 04/14/2023 Market Date
Short Volume Ratio
Short Volume Total Volume (In Millions)
Short Volume:
15,981
04/13/23
20,379
32,353
62.99
04/12/23
33,243
44,695
74.38
Market Volume: 20,509
04/11/23
22,803
31,385
72.66
Short Volume Ratio:
77.92
04/10/23
28,180
40,475
69.62
Short Shares Availability: 550,000
04/06/23
20,128
31,674
63.55
Short Borrow Fee Rate (%): 0.25
04/05/23
21,346
32,586
65.51
Why is this important : A reduction in the percentage of short float typically represents optimism in the company by the stock market from a larger viewpoint
CONCLUSION Kinsale Capital Group, Inc. (NYSE:KNSL) is a specialty insurance company that offers property and casualty insurance for Small and Medium sized businesses. As there is uncertainty in the overall market, insurance will have a volatile reaction to any catastrophic events. Kinsale does insure themselves against losses due to insurance claims, providing some protection to their investors. Due to this they generate lower income as their cost of business is higher due to the additional insurance expenses.
Threats ● Changes in the regulatory environment could impact the company's ability to write profitable business or increase compliance costs.
Strengths ● Annual increases in dividends since 2016 ● Kinsale Capital Group Inc. reported strong financial performance in 2022
Opportunities ● Specialty insurer; can charge premiums on services provided ● Global leader in E&S underwriting
Weaknesses ● High volume down trend. ● High P/E Ratio. (common for insurance)
Follow us on Social Media -Youtube: Roots Research LLC -Twitter: @RootsResearch_ -Discord: Roots Research -Spotify: Roots Report
Thank you for the reading this Roots Research publication on KNSL
No member(s) of Roots Research LLC have a position in their total portfolio
Published by Roots Research, LLC. on {MONTH} XXth, 2023
REFERENCES
Title Page - "Kinsale Announces Promotions." Business Wire, 6 Mar. 2023, www.businesswire.com/news/home/20230306005583/en/Kinsale-Announces-Promotions. Why We Are Talking About This Stock - Kinsale Capital Group. “Kinsale Capital Group Announces First Quarter 2023 Earnings Release Date and Conference Call.” News release, 5 Apr. 2023, https://ir.kinsalecapitalgroup.com/news/news-details/2023/Kinsale-Capital-Group-Announces-First-Quarter-2023-Earnings-Release-Date-and-Conference-Call/default.aspx. “Kinsale Capital Group, Inc. (KNSL) Company Profile & Facts - Yahoo Finance.” @YahooFinance, 2021, finance.yahoo.com/quote/KNSL/profile?p=KNSL. “Form 10-K.” SEC EDGAR, 24 Feb. 2023, www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F0001669162%2F000166916223000009%2Fknsl-20221231.htm. About the Company - “Form 10-K.” SEC EDGAR, 24 Feb. 2023, www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F0001669162%2F000166916223000009%2Fknsl-20221231.htm. Previous Market Sentiment - “Announcement.” Yahoo, 5 Apr. 2023, finance.yahoo.com/news/kinsale-capital-group-announces-first-200500238.html. “Promotions.” Yahoo, 6 Mar. 2023, finance.yahoo.com/news/kinsale-announces-promotions-210500611.html. “Q4.” Yahoo, 16 Feb. 2023, finance.yahoo.com/news/kinsale-capital-group-inc-reports-211000178.html. “Acquisition.” Yahoo, 16 Dec. 2022, finance.yahoo.com/news/kinsale-capital-group-announces-acquisition-133100927.html. Earnings Report - “Form 10-K.” SEC EDGAR, 24 Feb. 2023, www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F0001669162%2F000166916223000009%2Fknsl-20221231.htm. Insider Trading - “Insider.” Fintel, 14 Apr. 2023, fintel.io/n/us/knsl. Institutional Ownership - “KNSL Institutional Ownership and Shareholders - Kinsale Capital Group Inc (NASDAQ) Stock.” Fintel.io, fintel.io/so/us/knsl. Accessed 15 Apr. 2023. Short Interest - “KNSL - Short Interest - Kinsale Capital Group Inc (NASDAQ) Stock - Short Squeeze, Borrow Rates.” Fintel.io, fintel.io/ss/us/knsl. Accessed 15 Apr. 2023. “KNSL Short Interest Ratio and Volume (Kinsale Capital Group).” Www.marketbeat.com, www.marketbeat.com/stocks/NYSE/KNSL/short-interest/. Accessed 15 Apr. 2023. Conclusion - “Insider.” Fintel, 14 Apr. 2023, fintel.io/n/us/knsl.
“KNSL Institutional Ownership and Shareholders - Kinsale Capital Group Inc (NASDAQ) Stock.” Fintel.io, fintel.io/so/us/knsl. Accessed 15 Apr. 2023 “KNSL - Short Interest - Kinsale Capital Group Inc (NASDAQ) Stock - Short Squeeze, Borrow Rates.” Fintel.io, fintel.io/ss/us/knsl. Accessed 15 Apr. 2023. “KNSL Short Interest Ratio and Volume (Kinsale Capital Group).” Www.marketbeat.com, www.marketbeat.com/stocks/NYSE/KNSL/short-interest/. Accessed 15 Apr. 2023.
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14Made with FlippingBook. PDF to flipbook with ease