Company Overview - Kingstone Companies (KINS) is the 12th largest homeowner insurer in New York with a market share of 2.1% in 2024 and a market capitalization of $232.3 million [2] - KINS shares are trading at a price-to-book value of 3.48X, significantly higher than the industry average of 1.58X, indicating a premium valuation [1] Financial Performance - The Zacks Consensus Estimate for 2025 earnings is $1.90, reflecting a 31% increase on revenues of $214 million, which is 37.9% higher than previous figures [7] - KINS expects earnings per share in 2025 to range between $1.75 and $2.15 [7] - The company has seen a significant improvement in profitability, with net margin increasing by 2,910 basis points over the past two years, returning to profitability in 2024 after three consecutive years of losses [13] Growth Strategy - Kingstone is pursuing a focused growth strategy by emphasizing its core business and exiting underperforming segments [11] - The company expects direct written premiums in its core business to grow between 15% and 25% in 2025 [12] - Kingstone's partnership with Earnix has enhanced its pricing sophistication, allowing it to implement pricing increases that align premiums with risk levels [11] Market Position and Outlook - The commercial insurance market in the Northeastern U.S. is projected to grow by 12.3% through 2025, positioning Kingstone to capitalize on market shifts due to competitors withdrawing from the personal property insurance segment [10] - Kingstone's return on equity (ROE) in the trailing 12 months was 35.7%, significantly higher than the industry average of 7.8%, with expectations of ROE between 27% and 35% in 2025 [14] - The return on invested capital (ROIC) was 29.4%, also above the industry average of 5.9%, indicating efficient fund utilization [15] Investment Potential - Kingstone's focus on strengthening its niche market position, improving pricing and combined ratio, and delivering strong earnings suggests positive growth potential [16] - The average target price for KINS is $14, indicating a 12.6% upside potential from its last closing price [16] - Despite its high valuation, KINS is rated as a Zacks Rank 1 stock, suggesting it is a worthy addition to investment portfolios [17]

Company Overview - Kingstone Companies Inc. is a regional property and casualty insurer based in New York, primarily focusing on personal lines, especially homeowners insurance [1] - The company sells its insurance products through a controlled group of independent agents, emphasizing disciplined underwriting [1] Investment Focus - The analysis primarily targets small- to mid-cap companies, which are often overlooked by many investors, while also occasionally reviewing large-cap names to provide a broader market perspective [1]

Financial Performance - Net premiums earned increased to $43,523,063 for Q1 2025, up from $28,819,902 in Q1 2024, representing a growth of 51.2%[17] - Total revenues for Q1 2025 reached $50,498,775, compared to $35,765,177 in Q1 2024, marking an increase of 41.2%[17] - Net income for Q1 2025 was $3,882,660, significantly higher than $1,426,679 in Q1 2024, reflecting a growth of 172.5%[17] - Earnings per share (basic) increased to $0.29 in Q1 2025 from $0.13 in Q1 2024, a growth of 123.1%[17] - The company reported a comprehensive income of $6,105,846 for Q1 2025, compared to $986,271 in Q1 2024, reflecting a significant increase of 519.5%[17] - Cash flows provided by operating activities for the three months ended March 31, 2025, were $17,857,307, up from $6,098,220 in 2024[22] - The Company reported a net income of $3,883,000 for the three months ended March 31, 2025, an increase of $2,456,000 or 172.1% compared to $1,427,000 in the same period of 2024[204] Assets and Liabilities - Total assets as of March 31, 2025, amounted to $385,439,240, an increase from $374,915,843 at December 31, 2024, indicating a growth of 2.8%[14] - Total liabilities decreased to $303,229,277 as of March 31, 2025, down from $308,207,392 at December 31, 2024, a reduction of 1.6%[14] - Cash and cash equivalents rose to $37,490,182 at March 31, 2025, compared to $28,669,441 at December 31, 2024, an increase of 30.7%[14] - Total investments increased to $225,869,300 as of March 31, 2025, compared to $208,617,941 at December 31, 2024, a growth of 8.2%[14] Loss and Expense Management - Loss and loss adjustment expenses for Q1 2025 were $27,175,078, up from $17,859,587 in Q1 2024, representing a rise of 52.5%[17] - The net loss ratio for the three months ended March 31, 2025, was 62.4%, compared to 62.0% in the prior year, indicating a slight increase in loss experience[155] - The net balance of unpaid loss and loss adjustment expense reserves at the end of March 2025 was $102,093,128, up from $89,774,303 at the end of March 2024, indicating an increase of approximately 13.6%[59] - The Company incurred total losses of $27,175,078 for the three months ended March 31, 2025, compared to $17,859,587 for the same period in 2024, representing an increase of approximately 52.9%[59] Reinsurance and Risk Management - The Company entered into a 27% quota share reinsurance treaty for personal lines business effective January 1, 2024, which was replaced by a 16% quota share treaty effective January 1, 2025[78] - The Underlying excess of loss reinsurance treaty provides 50% coverage for losses of $400,000 in excess of $600,000, with the retention increasing from $530,000 to $640,000 between the 2024/2025 and 2025/2026 treaties[79] - The Company’s participation in reinsurance arrangements does not relieve it of its obligations to policyholders, ensuring continued commitment to policyholder protection[83] Stock and Equity - Net proceeds from the issuance of common stock amounted to $9,545,692 in Q1 2025[22] - KICO's total debt was $5,364,265, a decrease from $11,171,420 as of December 31, 2024[89] - The Company sold 612,999 shares of Common Stock at a weighted average price of $16.00 per share during the three months ended March 31, 2025, raising $9,545,692 in net proceeds under the ATM program[123] - The Company granted 70,934 restricted stock awards with a weighted average fair value of $15.31 per share during the three months ended March 31, 2025, resulting in an aggregate fair value of $1,086,187[113] Operational Metrics - The net combined ratio for the period was 93.7%, slightly up from 93.3% in the prior year, indicating stable underwriting performance[155] - The company achieved a net underwriting expense ratio of 33% for the year ended December 31, 2024[195] - The Company’s insurance operations are evaluated on underwriting results, which include net premiums earned and loss adjustment expenses, contributing to the net combined ratio[148] Policy and Premiums - The company entered into a renewal rights agreement to offer a replacement policy to selected homeowners policyholders in Downstate New York, encompassing approximately $70 million in written premium[159] - Direct written premiums for the three months ended March 31, 2025, were $58,175,000, an increase of $8,850,000 or 17.9% compared to $49,325,000 in the same period of 2024[204] - Core direct written premiums increased by 22.7% to $57,175,000 compared to $46,587,000 for the same period in 2024[198] - Non-Core direct written premiums decreased by 63.5% to $1,000,000 for the three months ended March 31, 2025, down from $2,738,000 in 2024[198]

Market Overview - Major U.S. stock indices ended May 13 on a higher note due to easing trade tensions between the U.S. and China, along with softer-than-expected inflation data [1] - The two nations agreed to a 90-day tariff pause, which has contributed to increased investor optimism [1] Investment Strategy - Positive market sentiment may encourage investors to trade on Wall Street, but the sustainability of this rebound is uncertain due to the temporary nature of the tariff pause and changing global market dynamics [2] - To mitigate potential losses during market turmoil, it is advisable to select low-leverage stocks such as 1st Source (SRCE), Kingstone Companies (KINS), MasTec (MTZ), Dorman Products (DORM), and Sterling Infrastructure, Inc. (STRL) [2] Understanding Leverage - Leverage refers to the practice of borrowing capital for operations and expansion, typically through debt financing [4] - Excessive debt financing can lead to significant losses, making it crucial for investors to avoid companies with high debt levels [5] Debt-to-Equity Ratio - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with a lower ratio indicating better solvency [7] - Companies with high debt-to-equity ratios may face challenges during economic downturns, despite strong earnings growth [8] Stock Selection Criteria - Stocks should have a debt-to-equity ratio lower than the industry median, a current price of at least $10, and an average 20-day trading volume of 50,000 or more [11] - Additional criteria include a percentage change in EPS greater than the industry median, a VGM Score of A or B, estimated one-year EPS growth greater than 5%, and a Zacks Rank of 1 or 2 [12] Company Highlights - **1st Source (SRCE)**: A bank holding company with a net income of $37.52 million for Q1 2025, up 27.38% year-over-year, and a return on average assets of 1.72% [14][15] - **Kingstone Companies (KINS)**: A property and casualty insurance holding company with a 51% year-over-year increase in net premium earned and a 125% surge in EPS for Q1 2025 [16][17] - **MasTec (MTZ)**: An infrastructure construction company with a 6% year-over-year revenue increase and a projected 54.9% improvement in earnings for 2025 [18] - **Dorman Products (DORM)**: A supplier of automotive replacement parts with an 8.3% increase in net sales and a 54% rise in adjusted EPS for Q1 2025 [19][20] - **Sterling Infrastructure (STRL)**: A company specializing in E-Infrastructure and building solutions, reporting a 7% revenue increase and a 29% surge in adjusted EPS for Q1 2025 [21]

Financial Data and Key Metrics Changes - The company reported a net income of $3,900,000 or $0.27 per diluted share, marking a 172% increase in net income compared to the prior year [4][16] - Direct written premium growth was 18% overall, with a 23% increase in the core business [4][9] - The combined ratio was 93.7%, close to the 93.3% from the same quarter last year, while operating income nearly tripled to $2,400,000 [13][16] Business Line Data and Key Metrics Changes - The select homeowners program's cumulative frequency decreased for thirteen consecutive quarters, with a frequency of 1.6% compared to 2.3% for the legacy product [8] - Core policies in force increased by 10% year-over-year, led by a 19% increase in homeowners policies [10] - New business policy count saw a 68% increase, contributing to the growth in core business premiums [9] Market Data and Key Metrics Changes - The company expects to generate $25,000,000 to $35,000,000 in premiums from the Amgard transaction over a twelve-month period [9][27] - The hard market conditions in Downstate New York remain stable, with companies beginning to increase their underwriting appetite [9] Company Strategy and Development Direction - The company plans to focus on its core state of New York and capitalize on hard market conditions to maximize profitable growth [8][46] - There is a cautious approach towards expanding into other jurisdictions, with a strategy for 2026 and beyond [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business trajectory, reaffirming guidance for the calendar year 2025 despite uncertainties surrounding the Amgard transaction [16] - The company is confident in its ability to generate long-term value for shareholders through disciplined execution and strategic growth [16] Other Important Information - The company finalized the sale of its headquarters, resulting in a one-time after-tax gain of $1,500,000 [13] - Net investment income increased by 36% to $2,000,000, driven by strong cash generation from operations [14] Q&A Session Summary Question: Fire losses details - Management confirmed that fire losses were 3.3 points higher than anticipated, offset by lower catastrophe losses [20] Question: Capital management priorities - The board is actively discussing capital return opportunities, including restoring dividends, but no share buybacks are envisioned in the near future [24][25] Question: Update on CFO search - A retained search firm has been hired, and interviews are ongoing for the CFO position [28] Question: Expansion into other states - The focus remains on Downstate New York for 2025, with potential for future expansion being considered thoughtfully [46]

Financial Data and Key Metrics Changes - The company reported a net income of $3,900,000 or $0.27 per diluted share, marking a 172% increase in net income compared to the prior year [3][16] - Direct written premium growth was 18% overall, with a 23% increase in the core business, while non-core business saw a 64% reduction as planned [3][8] - The combined ratio was 93.7%, close to the 93.3% from the same quarter last year, while operating income nearly tripled to $2,400,000 [12][16] Business Line Data and Key Metrics Changes - The select homeowners program's cumulative frequency decreased for thirteen consecutive quarters, with a frequency of 1.6% compared to 2.3% for the legacy product [7] - Core policies in force increased by 10% year-over-year, led by a 19% increase in homeowners policies [9] - New business policy count increased by 68%, contributing to the growth in core business premiums [8] Market Data and Key Metrics Changes - The company expects to generate $25,000,000 to $35,000,000 in premiums from the Amgard transaction over a twelve-month period [8][16] - The hard market conditions in Downstate New York remain stable, with companies beginning to increase their underwriting appetite [8] Company Strategy and Development Direction - The company plans to focus on its core state of New York and capitalize on hard market conditions to maximize profitable growth [7][16] - There is a cautious approach to potential expansion into other states, with a strategy for 2026 and beyond, ensuring that products match rate to risk [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business, reaffirming guidance for the calendar year 2025 [16] - The company is confident in its ability to generate long-term value for shareholders through disciplined execution and strategic planning [16] Other Important Information - The company finalized the sale of its headquarters, resulting in a one-time after-tax gain of $1,500,000, and fully paid off remaining holding company debt, saving over $800,000 in annual interest [12] - Net investment income increased by 36% to $2,000,000, driven by strong cash generation from operations [13] Q&A Session Summary Question: Fire losses details - Fire losses were 3.3 points higher than anticipated, offset by lower catastrophe losses [20] - Management is not concerned about these fire losses as they are considered random events [21] Question: Combined ratio guidance - The combined ratio guidance was not updated due to the offsetting nature of fire and catastrophe losses [22][23] Question: Capital management priorities - The Board is discussing restoring dividends, but share buybacks are not envisioned in the near future [24][25] Question: Amgard transaction pricing - Amgard's pricing is expected to be higher, and the company is uncertain about the impact of the transaction [26][27] Question: CFO search update - A retained search firm has been hired, and interviews are ongoing for the CFO position [28] Question: Net investment income growth - The increase in investment income is due to cash generation from profitability and strategic investment portfolio management [38] Question: Intrinsic value of Kingstone - Management did not provide specific insights on intrinsic value but acknowledged the importance of increasing company value [40] Question: Expansion into other jurisdictions - The focus remains on Downstate New York for 2025, with potential expansion considered for 2026 and beyond [46]

Financial Data and Key Metrics Changes - The company reported a net income of $3,900,000 or $0.27 per diluted share, marking a 172% increase in net income compared to the prior year [3][16] - Direct written premium growth was 18% overall, with a 23% increase in the core business [3][16] - The combined ratio was 93.7%, close to the 93.3% from the same quarter last year, while operating income nearly tripled to $2,400,000 [12][16] Business Line Data and Key Metrics Changes - The select homeowners program's cumulative frequency decreased for thirteen consecutive quarters, with a frequency of 1.6% compared to 2.3% for the legacy product [6] - Core policies in force increased by 10% year-over-year, led by a 19% increase in homeowners policies [9] - New business policy count increased by 68%, contributing to the growth in core business premiums [8] Market Data and Key Metrics Changes - The company expects to generate $25,000,000 to $35,000,000 in premiums from the Amgard transaction over a twelve-month period [8] - The hard market conditions in Downstate New York remain stable, with companies beginning to increase their underwriting appetite [8] Company Strategy and Development Direction - The company plans to focus on its core state of New York and capitalize on hard market conditions to maximize profitable growth [7][16] - There is a cautious approach towards expanding into other jurisdictions, with a strategy set for 2026 and beyond [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business, emphasizing the discipline of the underwriting strategy in a challenging environment [16] - The company does not anticipate a material impact from inflation on results, maintaining a flat expense ratio [12] Other Important Information - The company finalized the sale of its headquarters, resulting in a one-time after-tax gain of $1,500,000 [12] - Net investment income increased by 36% to $2,000,000, driven by strong cash generation from operations [13] Q&A Session Summary Question: Fire losses details - Management confirmed that fire losses were 3.3 points higher than anticipated, offset by lower catastrophe losses, and expressed no concern over these losses as they were random events [20][21] Question: Capital management priorities - The Board is actively discussing the restoration of dividends, but no share buybacks are envisioned in the near future due to growth opportunities [24][25] Question: Amgard transaction pricing - Management indicated that Amgard's pricing is higher and that they are filing for a rate increase in New York, which may close the pricing gap [26][27] Question: CFO search update - A retained search firm has been hired, and interviews are ongoing to fill the CFO position [28] Question: Expansion into other states - The company will focus on Downstate New York for 2025 but is considering other geographies for future growth, ensuring a thoughtful approach [45][46]

Financial Performance & Growth - Kingstone's stock price was $1862 as of March 31, 2025, with 13,759,292 shares outstanding[9] - Direct premiums written grew by 179% to $58175 thousand in Q1 2025 compared to $49325 thousand in Q1 2024[55] - Net premiums earned increased by 510% to $43523 thousand in Q1 2025 from $28820 thousand in Q1 2024[55] - Net income surged by 1721% to $3883 thousand in Q1 2025, up from $1427 thousand in Q1 2024[55] - The annualized return on equity was 208% in Q1 2025, compared to 164% in Q1 2024[55] - Adjusted EBITDA increased by 451% to $4256 thousand in Q1 2025 from $2934 thousand in Q1 2024[55] Business Strategy & Market Position - Core business, representing 96% of total policies, focuses on growth in Downstate NY[16] - The company is capitalizing on a >$200 million market opportunity due to competitor withdrawal from New York State[29] - Kingstone was ranked as the 12th largest homeowners insurer in NY in 2024 with a market share of 21%[16] Portfolio & Reinsurance - 83% of the fixed income portfolio is rated A or higher[64] - The average portfolio yield is 359%[64] 2025 Guidance - The company anticipates core business direct premiums written growth of 15% to 25%[66] - The combined ratio is projected to be between 81% and 85%[66] - Net income per share is estimated to be $190 to $230 basic and $175 to $215 diluted[66] - The return on equity is projected to be between 27% and 35%[66]

Conference Call and Financial Results - Kingstone Companies, Inc. will hold a conference call on May 9, 2025, at 8:30 A.M. ET to discuss its business operations and first quarter results[3] - The financial results news release is scheduled to be issued on May 8, 2025, after the stock markets close[3] Press Release Information - The press release regarding the financial results will not be deemed "filed" under the Securities Exchange Act of 1934[4] - The information in the press release will not be incorporated by reference into any registration statement unless specifically identified[6] Company Leadership - Meryl Golden serves as the President and CEO of Kingstone Companies, Inc.[11]

Kingstone Companies (NASDAQ: KINS ) is a small, regional insurance company operating in the New York area. I wrote my first article on the company back in January. The stock had been performing spectacularly until the tariffL/S Equity Research. Mostly micro and small caps. I use this platform to bounce ideas around and try to get different point of views. Contact me at theredkraken7@gmail.com, it's always nice to make new friends =)Analyst’s Disclosure: I/we have a beneficial long position in the shares of ...