Leading insurance stock Kinsale Capital Group formed a new base and earned a place on the IBD Breakout Stocks Index. And it's in good company.
KNSL stock joins a recent basket of stocks added to the index, which is tracked by the IBD Breakout Opportunities ETF.
Other defensive names added to the list include food giants Conagra Brands and Campbell Soup.
Medical industry stocks Intra-Cellular Therapies, Merit Medical Systems and Ensign Group also made the list.
Lastly, the energy industry is heavily represented, with giants Exxon Mobil, BP, Denbury and Shell.
Property-Casualty Carrier Insures Numerous Risks
Kinsale Capital provides casualty and specialty casualty, property, professional lines and transportation insurance products. Its casualty insurance covers everything from cannabis to construction industries.
The specialty casualty handles energy, entertainment, environmental, and life sciences industries, and product recall and product liability.
Its professional lines oversee health and public entities and professional liability coverage while its transportation unit insures aviation, auto and marine businesses.
KNSL stock is ranked first out of 62 components in the Insurance-Property/Casualty/Title group, which holds 106th place out of 197 IBD industry groups.
Insurance Stock Builds Another Base
The insurance stock is forming a cup base with a 337.22 buy point that emerged from the handle of a cup-with-handle base.
The base started after Kinsale reported better-than-expected Q4 earnings and sales on Feb. 16. The insurance stock soared 14.5% in heavy volume the following day.
But KNSL then traded choppy and rolled over, dropping through its 50-day moving average.
The stock reclaimed the 50-day line in March and has been steadily climbing the right side of a cup base since that time. Shares are about 7% from the buy point.
Strong Insurance Stock Earnings Growth
The insurance stock posted respectable 48% earnings and 32% sales growth in the fourth quarter, continuing a history of solid performance.
FactSet estimates a profit of $2.20 per share in Q1 2023, which would mark 35% year-over-year growth. Full-year EPS is forecast to grow nearly 24% to $9.66 in 2023 and almost 20% in 2024 to $11.55.
Q4 gross premiums grew 45% to $295.5 million. FactSet expects $304.3 million premiums in the first quarter.
Full-year 2022 gross premiums popped a similar 44% to $1.1 billion, with a projected $1.338 billion in 2023.
Return on equity grew to 25%, from 20.8% in 2021. The CAN SLIM investing strategy looks for companies with a minimum of 17% ROE, the higher the better.
Kinsale reports Q1 earnings on April 27.
The insurance stock holds an impressive 97 out of 99 EPS Rating and a healthy Stability Rating of 9. The IBD Stability rating measures 3 to 5 years of earnings history on a scale of 1 to 99, with 1 being the best. The lower the number, the more stable the earnings rate.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator funds.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
