Kinsale Capital Group is today's selection for IBD 50 Stocks To Watch. The growth stock is forming a flat base with a buy point of 345.75.
Shares rebounded from the 50-day moving average in strong volume on Friday. It is the latest in a series of bases that have produced moderate gains, according to IBD MarketSmith.
Because of the smaller gains from each breakout, the current base is still an early-stage one. It indicates the stock can still make an outstanding run from here. MarketSmith data also indicates increasing fund ownership over the past eight quarters. Funds own 60% of Kinsale's shares outstanding.
The growth stock has perfect Composite and EPS Ratings of 99 and a Relative Strength Rating at 91. Fiscal first-quarter sales of $256.9 million were up 42% while earnings per share of $2.44 surged 50% from the previous year.
The Richmond, Va.-based company saw gross written premium revenue grow 45.6% to $357.6 million from the year-ago quarter.
According to President and CEO Michael Kehoe, the growth in first-quarter premium reflected a combination of disciplined underwriting, technology-enabled cost advantages and favorable market conditions.
The growth stock got an upgrade from BMO Capital last week to outperform from underperform with a price target of 389, up from 270.
Earnings Estimates For Growth Stock KNSL
Sales growth has ranged from 17% to 42% over the past seven quarters while earnings growth has surged as high as 279% and come in as low as 3% over the same period. Wall Street estimates 30% top-line growth for the specialty insurance company in 2023, tapering off to 18% in 2024. EPS is expected to climb 42% this year, 22% next year.
Kinsale Capital focuses on insurance products for hard-to-cover risks for small and midsize businesses. The specialty insurance company also covers risks associated with product liability and recalls for the energy, life science, entertainment and environment industries.
Its professional insurance segment provides liability coverage for heath businesses and public agencies. It also has a transportation product that covers risks for the aviation, marine and auto industries. And it has a personal insurance business, too.
The growth stock sells insurance products in Puerto Rico and the Virgin Islands through several independent brokers.
A dividend of 14 cents per share is payable June 13 to shareholders of record as of May 31.
Kinsale Capital Group leads the property and casualty insurance group, which holds 78th place among IBD's 197 industry groups.
Other stocks in the group include ArchCapital and RenaissanceRe Holdings.
Exchange traded funds holding the growth stock include iShares Core S&P Mid-Cap ETF and the Vanguard Small Cap ETF.
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