Shares of Kemper (KMPR) have gained 0.8% over the past four weeks to close the last trading session at $60.73, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $76.60 indicates a potential upside of 26.1%. The average comprises five short-term price targets ranging from a low of $71 to a high of $85, with a standard deviation of $5.86. While the lowest estimate indicates an incre ...

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. While many investors like to look for momen ...

Second Quarter 2024 Earnings August 5, 2024 KEMPER Earnings Call Presentation – 2Q 2024 Preliminary Matters Cautionary Statements Regarding Forward-Looking Information This presentation may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual ...

Financial Data and Key Metrics Changes - The company reported net income of $75 million, with a return on equity (ROE) of approximately 11.5% and an adjusted ROE of over 17% [10][12] - The specialty P&C segment achieved a strong underlying combined ratio of 90%, showing significant year-over-year and sequential improvement [10][12] - Adjusted consolidated operating income was $91.7 million, translating to $1.42 per diluted share [12] Business Line Data and Key Metrics Changes - The specialty auto business experienced a sequential quarter policy in force (PIF) growth of about 4.5%, indicating strong franchise strength and competitive advantages [6][10] - The life business maintained stable underlying fundamentals, although it faced a negative impact from a valuation adjustment on a real estate investment [11][20] Market Data and Key Metrics Changes - The company noted that the second half of 2024 is likely to produce PIF growth at a more modest rate due to seasonal buying patterns [10][19] - The specialty P&C segment's combined ratio is expected to migrate back to a more traditional range over the next four to six quarters, influenced by market dynamics [14][19] Company Strategy and Development Direction - The company aims to gradually remove non-rate actions and return to a normal balance while guiding the business back to traditional margin and growth ranges [8][9] - Long-term goals for the specialty auto segment include achieving a combined ratio of 96% or better while maximizing growth [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding the previously stated 10% ROE guidance for 2024, citing strong first-half results and no anticipated trends that would cause earnings to decline significantly [8][12] - The management acknowledged the volatile market environment and emphasized the importance of maintaining a margin of safety in business practices [7][18] Other Important Information - The company reported a parent company liquidity of approximately $1.1 billion, allowing for dividend payments and support for operating subsidiaries [14][15] - The preferred P&C exit is expected to release over $130 million of capital this year, modestly ahead of schedule [15] Q&A Session Summary Question: Insights on PIF growth and market positioning - Management indicated that seasonal buying patterns significantly influence PIF growth expectations for the second half of the year, with historical trends showing less shopping activity [24][25] Question: Combined ratio and new business penalty - Management clarified that the expected drift in combined ratio is influenced by new business penalties and the removal of non-rate actions, aiming to balance growth and profitability [27][28] Question: Rate changes in the second quarter - A small rate decrease of 2% was implemented in Florida, but overall rate levels remained stable [30] Question: Non-rate actions removal status - Management estimated that approximately 75% of non-rate actions have been removed, indicating progress towards normal operations [33] Question: Outlook for net investment income - Management expects net investment income to return to historical levels, excluding the impact of the real estate valuation adjustment [35] Question: Clarification on PIF growth expectations - Management confirmed expectations of low-single-digit sequential PIF growth in the upcoming quarters, consistent with seasonal trends [40]

Core Viewpoint - PennantPark Floating Rate Capital Ltd. has successfully closed a $300.7 million debt securitization through its subsidiary, enhancing its capital position and extending the maturity of the debt to April 2036 [1][2]. Group 1: Debt Structure - The debt issued in the CLO is structured with various classes, including: - A-1-R Loans: $103 million, 34.3% of capital structure, coupon at 3 Mo SOFR + 1.93%, rated AAA [2] - A-1-R Notes: $71 million, 23.6% of capital structure, coupon at 3 Mo SOFR + 1.93%, rated AAA [2] - A-2-R Notes: $5 million, 1.7% of capital structure, coupon at 3 Mo SOFR + 2.20%, rated AAA [2] - B-R Notes: $25 million, 8.3% of capital structure, coupon at 3 Mo SOFR + 2.35%, rated AA [2] - C-R Notes: $24 million, 8.0% of capital structure, coupon at 3 Mo SOFR + 3.10%, rated A [2] - D-R Notes: $18 million, 6.0% of capital structure, coupon at 3 Mo SOFR + 4.95%, rated BBB- [2] - E-R Notes: $18 million, 6.0% of capital structure, coupon at 3 Mo SOFR + 7.50%, rated BB- [2] - Preferred Shares: $36.7 million, 12.1% of capital structure, not rated [2] - The total amount of the debt is $300.7 million [2]. Group 2: Company Overview - PennantPark Floating Rate Capital Ltd. primarily invests in U.S. middle market private companies through floating rate senior secured loans, including first lien, second lien, and subordinated debt [4]. - The company is managed by PennantPark Investment Advisers, LLC, and has a significant focus on middle market credit [4][7]. - PennantPark manages approximately $2.8 billion in CLO middle market assets and has a total of $7.5 billion of investable capital [2][7]. Group 3: Joint Venture - PennantPark Senior Secured Loan Fund I LLC is a joint venture between PennantPark Floating Rate Capital Ltd. and Kemper Corporation's subsidiary, primarily investing in U.S. middle market companies with below investment grade debt [5].

Core Viewpoint - Kemper (KMPR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][2][10] Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5] - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to price movements based on their buying or selling actions [3] Company Performance and Outlook - The upgrade for Kemper reflects an improvement in the company's underlying business, suggesting that investor sentiment may drive the stock price higher [4] - Analysts have raised their earnings estimates for Kemper, with a projected earnings per share of $4.50 for the fiscal year ending December 2024, representing a year-over-year increase of 708.1% [7] Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [6][8] - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions and potential for market-beating returns [8]

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even though momentum is a popular stock char ...

Financial Performance - Book Value Per Share sequentially increased by $1.16 to $40.24[6] - Adjusted Consolidated Net Operating Income was $69.7 million, compared to $(55.7) million in the same quarter of the previous year[50] - Return on Tangible Shareholders' Equity was 17.2%, compared to (17.7)% in the same quarter of the previous year[55] Specialty P&C Insurance - Specialty P&C PIF Sequential Quarterly Change improved by 3.4 points, from (8.9)% to (5.5)%[9] - The underlying combined ratio improved 14.4 points year-over-year and 4.6 points sequentially to 93.6%[13, 102] - Earned premiums decreased by 11.0% year-over-year[89] - New business apps in 1Q'24 were approximately 2.6 times that of 4Q'23[103, 111, 115] Life Insurance - Face Value of In-Force decreased by 0.9% year-over-year[19] - Total Segment Adjusted Net Operating Income decreased by 7.7% to $12 million[24] Liquidity and Capital - Parent company liquidity was approximately $1.1 billion[87]

For the quarter ended March 2024, Kemper (KMPR) reported revenue of $1.13 billion, down 11.7% over the same period last year. EPS came in at $1.07, compared to -$1.02 in the year-ago quarter.The reported revenue represents a surprise of +3.41% over the Zacks Consensus Estimate of $1.09 billion. With the consensus EPS estimate being $1.09, the EPS surprise was -1.83%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expecta ...

[Caution Regarding Forward-Looking Statements](index=3&type=section&id=Caution%20Regarding%20Forward-Looking%20Statements) [Forward-Looking Statements Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20Disclosure) Forward-looking statements in this report are subject to risks and uncertainties that may cause actual results to differ materially - Forward-looking statements are identified by words such as "believe," "estimate," "anticipate," "forecast," "project," "plan," "intend," and "expect"[11](index=11&type=chunk) - Actual results may differ materially from forward-looking statements due to various factors, including but not limited to[12](index=12&type=chunk)[13](index=13&type=chunk) - **Legal and Regulatory Environment:** Changes in regulations, adverse litigation outcomes, and cybersecurity risks[14](index=14&type=chunk)[16](index=16&type=chunk) - **Insurance Claims and Reserves:** Catastrophe frequency/severity, inflation impact on claims, and changes in reinsurance[15](index=15&type=chunk)[19](index=19&type=chunk) - **Competitive and Business Environment:** Competition, success of strategic initiatives, technology risks, and general economic conditions[17](index=17&type=chunk)[18](index=18&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2024 consolidated financial statements show a significant turnaround to profitability, driven by improved underwriting results [Condensed Consolidated Statements of Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Q1 2024 net income reached **$71.3 million**, a significant improvement from a **$80.1 million net loss** in Q1 2023, primarily due to reduced expenses Q1 2024 vs. Q1 2023 Income Statement Highlights | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Total Revenues | $1,143.0 | $1,294.8 | | Total Expenses | $1,056.4 | $1,398.7 | | Income (Loss) before Income Taxes | $86.6 | $(103.9) | | Net Income (Loss) attributable to Kemper | $71.3 | $(80.1) | | Diluted EPS | $1.10 | $(1.25) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets were **$12.63 billion**, with shareholders' equity increasing to **$2.59 billion** due to reduced liabilities Balance Sheet Summary | Metric | Mar 31, 2024 (in millions) | Dec 31, 2023 (in millions) | | :--- | :--- | :--- | | Total Investments | $8,764.6 | $8,904.2 | | Total Assets | $12,625.9 | $12,742.7 | | Total Insurance Reserves | $5,891.5 | $6,102.9 | | Total Liabilities | $10,037.2 | $10,237.7 | | Total Shareholders' Equity | $2,588.7 | $2,505.0 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to **$43.0 million** in Q1 2024, with investing activities turning positive, leading to a **$62.6 million** cash increase Cash Flow Summary | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $43.0 | $5.2 | | Net Cash Provided by (Used in) Investing Activities | $39.3 | $(138.2) | | Net Cash Used in Financing Activities | $(19.7) | $(18.8) | | Net increase (decrease) in cash | $62.6 | $(151.8) | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes provide detailed financial information, highlighting improved Specialty P&C performance, reduced adverse reserve development, and details on investments and debt Segment Adjusted Operating Income (Loss) | Segment (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Specialty Property & Casualty Insurance | $86.5 | $(74.7) | | Life Insurance | $14.0 | $14.8 | - Property and Casualty Insurance Reserves saw adverse development of **$8.8 million** from prior accident years in Q1 2024, a significant improvement from the **$41.9 million** adverse development in Q1 2023[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The company's fixed maturity investment portfolio had a fair value of **$6.77 billion** against an amortized cost of **$7.56 billion** as of March 31, 2024, indicating a significant unrealized loss position[72](index=72&type=chunk) - Total long-term debt outstanding was **$1.39 billion** as of March 31, 2024, with **$449.7 million** of 4.350% Senior Notes due 2025 classified as current[155](index=155&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2024 profitability to improved Specialty P&C underwriting, driven by rate increases and lower claim frequency Reconciliation of Net Income to Adjusted Consolidated Net Operating Income (Loss) | Metric (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) attributable to Kemper | $71.3 | $(80.1) | | Adjusted Consolidated Net Operating Income (Loss) | $69.7 | $(55.7) | - The **$151.4 million** increase in Net Income was primarily due to higher Adjusted Consolidated Net Operating Income, improved results from Non-Core Operations, and lower restructuring costs[192](index=192&type=chunk) - Earned Premiums decreased by **$149.0 million**, mainly from a **$104.2 million** reduction in the Specialty P&C segment due to lower new business volumes from actions taken to improve profitability[197](index=197&type=chunk) [Specialty Property & Casualty Insurance Segment](index=47&type=section&id=Specialty%20Property%20%26%20Casualty%20Insurance%20Segment) The Specialty P&C segment achieved a significant turnaround to **$69.2 million** adjusted net operating income in Q1 2024, with the combined ratio improving to **94.8%** Specialty P&C Segment Key Ratios | Ratio | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Incurred Loss and LAE Ratio | 73.7% | 91.6% | | Insurance Expense Ratio | 21.1% | 20.5% | | Combined Ratio | 94.8% | 112.1% | | Underlying Combined Ratio | 93.6% | 108.0% | - The improvement in results was driven by higher average earned premiums per exposure (up **25.6% YoY**), lower underlying claims frequency, and moderating claims severity trends[207](index=207&type=chunk) - Adverse prior year reserve development was **$6.0 million**, a significant improvement from **$31.1 million** in the prior-year quarter[207](index=207&type=chunk) [Life Insurance Segment](index=52&type=section&id=Life%20Insurance%20Segment) The Life Insurance segment's adjusted net operating income decreased to **$11.9 million** in Q1 2024 from **$13.2 million** in Q1 2023 Life Insurance Segment Financials | Metric (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Earned Premiums | $97.3 | $99.3 | | Net Investment Income | $44.3 | $49.8 | | Segment Adjusted Operating Income | $14.0 | $14.8 | | Total Segment Adjusted Net Operating Income | $11.9 | $13.2 | - Policyholders' Benefits and Incurred Losses and LAE decreased by **$6.9 million** due to changes in mortality experience in life insurance products[223](index=223&type=chunk) [Investment Results](index=53&type=section&id=Investment%20Results) Net investment income slightly decreased to **$100.4 million** in Q1 2024, with total comprehensive investment results reversing to a **$98.1 million loss** - The investment portfolio is primarily high-grade, with **95.8%** of fixed maturity investments rated as investment-grade (NAIC 1 or 2) as of March 31, 2024[234](index=234&type=chunk) Total Comprehensive Investment (Losses) Gains | Metric (in millions) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Gains Recognized in Income | $8.6 | $10.2 | | Recognized in Other Comprehensive Income | $(106.7) | $179.8 | | Total Comprehensive Investment (Losses) Gains | $(98.1) | $190.0 | [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity with **$395.6 million** in parent company cash and investments, supported by an undrawn **$600 million** credit facility - The parent company held cash and investments totaling **$395.6 million** at March 31, 2024[266](index=266&type=chunk) - The company has a **$600 million** unsecured credit agreement maturing in March 2027, with **$424.0 million** available as of March 31, 2024 There were no outstanding borrowings[257](index=257&type=chunk) - As of March 31, 2024, the remaining share repurchase authorization was **$171.6 million** No shares were repurchased in Q1 2024[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to the company's disclosures about market risk have occurred since the 2023 Annual Report on Form 10-K - No material changes to the Company's disclosures about market risk have occurred since the 2023 Annual Report[277](index=277&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[278](index=278&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[279](index=279&type=chunk) [PART II. OTHER INFORMATION](index=63&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, with no expected material effect on consolidated financial statements - Information regarding legal proceedings is incorporated by reference from Note 18 to the financial statements[281](index=281&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the significant risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K - The company refers readers to the risk factors section of its 2023 Annual Report for a discussion of significant risks[282](index=282&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Kemper did not repurchase any common stock during Q1 2024, with **$171.6 million** remaining available under its share repurchase authorization - No shares were repurchased during the quarter ended March 31, 2024[283](index=283&type=chunk) - The remaining share repurchase authorization was **$171.6 million** as of March 31, 2024[283](index=283&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including CEO and CFO certifications and XBRL data files