​Skyward Specialty Insurance Group Inc. (NASDAQ:SKWD) is one of the Best Small Cap Value Stocks to Buy. On December 9, Adam Klauber from William Blair reiterated a Buy rating on the stock without disclosing any price targets. Earlier on December 5, Meyer Shields from KBW raised the firm’s price target on Skyward Specialty Insurance Group Inc. (NASDAQ:SKWD) from $64 to $66, while maintaining a Buy rating on the stock. ​The improved Wall Street sentiment follows the company’s announcement regarding gaining ...

Core Insights - Three stocks with strong value characteristics and a buy rank are highlighted for investors: Skyward Specialty Insurance Group, Fox, and Two Harbors Investments Corp [1][2][3]. Group 1: Skyward Specialty Insurance Group, Inc. (SKWD) - Engages in underwriting commercial property and casualty insurance coverages primarily in the United States [1]. - Holds a Zacks Rank 1 (Strong Buy) [1]. - Zacks Consensus Estimate for current year earnings has increased by 6.3% over the last 60 days [1]. - Price-to-earnings ratio (P/E) is 12.53, compared to the industry average of 13.2 [2]. - Possesses a Value Score of A [2]. Group 2: Fox (FOX) - Produces and distributes news, sports, and entertainment content [2]. - Holds a Zacks Rank 1 (Strong Buy) [2]. - Zacks Consensus Estimate for current year earnings has increased by 7.7% over the last 60 days [2]. - Price-to-earnings ratio (P/E) is 13.73, compared to the industry average of 17.80 [3]. - Possesses a Value Score of A [3]. Group 3: Two Harbors Investments Corp (TWO) - Focuses on investing in, financing, and managing residential mortgage-backed securities and mortgage loans [3][4]. - Holds a Zacks Rank 1 (Strong Buy) [3]. - Zacks Consensus Estimate for current year earnings has increased by 10.3% over the last 60 days [3]. - Price-to-earnings ratio (P/E) is 8.6, compared to the industry average of 11.10 [4]. - Possesses a Value Score of B [4].

HOUSTON, Dec. 03, 2025 (GLOBE NEWSWIRE) -- Skyward Specialty Insurance Group, Inc. (Nasdaq: SKWD) (“Skyward Specialty” or the “Company”) today announced that it has secured the required regulatory approvals and approvals of the minority shareholders of its acquisition of Apollo Group Holdings Limited (“Apollo”). The transaction is expected to close early in the first quarter of 2026, subject to final closing conditions. Skyward Specialty also announced its financial guidance, inclusive of Apollo, for the 20 ...

Core Viewpoint - Skyward Specialty Insurance (SKWD) has shown a 7.4% increase in stock price over the past four weeks, with a mean price target of $61.4 indicating a potential upside of 25.4% from the current price of $48.96 [1] Price Targets and Analyst Estimates - The mean estimate consists of 10 short-term price targets with a standard deviation of $8.06, suggesting variability in analyst predictions. The lowest estimate is $49.00 (0.1% increase), while the highest is $75.00 (53.2% increase) [2] - Analysts' price targets can be misleading, as empirical research indicates that they rarely accurately predict stock price movements [7][10] - A low standard deviation among price targets indicates strong agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - There is increasing optimism among analysts regarding SKWD's earnings prospects, as indicated by a positive trend in earnings estimate revisions. This trend correlates strongly with near-term stock price movements [11] - Over the last 30 days, five earnings estimates for SKWD have been revised upward, resulting in a 5.5% increase in the Zacks Consensus Estimate [12] - SKWD holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13] Conclusion on Price Movement - While the consensus price target may not be a reliable measure of potential gains, the implied direction of price movement appears to be a useful guide for investors [14]

Core Insights - Skyward Specialty Insurance Group has promoted John Burkhart to President of U.S. Property & Casualty, aiming to enhance leadership and operational alignment for growth [1][3] - Burkhart will oversee additional divisions including Captives & Specialty Programs, Claims, Technology Solution Services, and Pricing Actuarial, expanding his responsibilities [2] - The company emphasizes the importance of strong leadership for its next growth phase, with confidence in Burkhart's ability to execute the company's strategic vision [3] Company Overview - Skyward Specialty is a rapidly growing specialty insurance company providing commercial property and casualty products on both non-admitted and admitted bases [4] - The company operates through nine underwriting divisions, including Accident & Health, Captives, and Professional Lines, among others [4] - Its subsidiary insurance companies are rated A (Excellent) with a stable outlook by A.M. Best Company, indicating strong financial health [5]

Core Viewpoint - Skyward Specialty Insurance (SKWD) shares have increased by 8.3% in the past four weeks, closing at $48.75, with a potential upside of 26% based on Wall Street analysts' mean price target of $61.4 [1] Price Targets and Analyst Estimates - The mean estimate consists of 10 short-term price targets with a standard deviation of $8.06, indicating variability among analysts; the lowest estimate is $49.00 (0.5% increase), while the highest is $75.00 (53.9% increase) [2] - Analysts' price targets can often mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10] - A low standard deviation in price targets suggests a high degree of agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - Analysts are optimistic about SKWD's earnings prospects, as indicated by a strong consensus in revising EPS estimates higher, which correlates with near-term stock price movements [11] - Over the last 30 days, five earnings estimates for SKWD have increased, leading to a 5.5% rise in the Zacks Consensus Estimate [12] - SKWD holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13] Conclusion on Price Movement - While consensus price targets may not reliably predict the extent of SKWD's gains, they do provide a useful guide for the direction of price movement [14]

Core Insights - Skyward Specialty Insurance Group, Inc. announced the appointment of Christopher Peirce to its Board of Directors effective February 1, 2026, as part of its strategic growth initiatives [1][3] Company Overview - Skyward Specialty is a rapidly growing specialty insurance company that provides commercial property and casualty products and solutions on both non-admitted and admitted bases [4] - The company operates through nine underwriting divisions, including Accident & Health, Agriculture and Credit (Re)insurance, Captives, Construction & Energy Solutions, Global Property, Professional Lines, Specialty Programs, Surety, and Transactional E&S [4] Leadership Changes - Christopher Peirce brings 30 years of experience from Liberty Mutual Insurance, where he held various leadership roles, including Chief Financial Officer and President of the Global Specialty and Commercial Markets division [2] - Peirce is expected to be appointed Chair of the Audit Committee after the close of the 2025 financial year, succeeding Robert Creager, who will not seek re-election [3] Company Ratings - Skyward Specialty's subsidiary insurance companies are rated A (Excellent) with a stable outlook by A.M. Best Company [5]

Financial Performance - Gross written premiums for Q3 2025 reached $606.5 million, a 51.6% increase from $400.0 million in Q3 2024[112] - Net written premiums for the nine months ended September 30, 2025, were $1.12 billion, up 32% from $852.6 million in the same period of 2024[112] - The company reported a net income of $45.9 million for Q3 2025, compared to $36.7 million in Q3 2024, reflecting a 25.5% year-over-year growth[112] - Adjusted operating income for Q3 2025 was $44.0 million, up from $29.4 million in Q3 2024, representing a 49.5% increase[113] - Net written premiums for Q3 2025 were $441.2 million, up 64.4% from $268.3 million in Q3 2024, with a year-to-date increase of 31.8% to $1,123.7 million compared to $852.6 million in the same period of 2024[120] - Net earned premiums for Q3 2025 increased by 30.5% to $351.8 million from $269.6 million in Q3 2024, with a year-to-date increase of 24.1% to $947.7 million compared to $763.5 million in the same period of 2024[121] Underwriting Performance - The loss and LAE ratio improved to 60.8% in Q3 2025 from 63.3% in Q3 2024, indicating better underwriting performance[112] - The combined ratio for the nine months ended September 30, 2025, was 89.6%, an improvement from 90.9% in the same period of 2024[112] - Total losses and LAE for Q3 2025 were $213.8 million, representing 60.8% of net earned premiums, an improvement from 63.3% in Q3 2024[123] - The expense ratio for Q3 2025 improved to 28.4% from 28.9% in Q3 2024, driven by earnings leverage despite higher acquisition costs[125] - Non-cat loss and LAE ratios improved by 0.4 points in Q3 2025 compared to Q3 2024, reflecting a favorable business mix shift[124] Investment Performance - Net investment income for Q3 2025 was $22.2 million, an increase of $2.6 million compared to $19.5 million in Q3 2024, attributed to higher income from the fixed income portfolio[127] - The investment portfolio's carrying value as of September 30, 2025, was $2.39 billion, up from $1.99 billion at the end of 2024, with fixed income representing 75.8% of the total portfolio[130] - As of September 30, 2025, the total fixed income portfolio was $1,815,216 thousand, an increase of 37.7% from $1,318,708 thousand at December 31, 2024[131] - The weighted average credit rating of the available-for-sale fixed income portfolio decreased from "AA-" in 2024 to "A+" in 2025[132] - The fair value of AAA-rated securities decreased from $483,099 thousand (37.3%) in 2024 to $311,740 thousand (17.3%) in 2025[132] Acquisition and Corporate Actions - The company announced an acquisition of Apollo Group Holdings Limited for $555.0 million, expected to close in Q1 2026[109] - The company recognized $3.1 million in acquisition-related expenses associated with the pending acquisition of Apollo[109] - The company approved a share repurchase program of up to $50.0 million in October 2024, with no shares repurchased as of September 30, 2025[150] Financial Strength and Ratings - The company has a financial strength rating of "A" (Excellent) with a stable outlook from A.M. Best Company[111] - A.M. Best affirmed the company's financial strength rating of A (Excellent) with a stable outlook on August 14, 2025[155] Cash Flow and Debt Management - Cash provided by operating activities increased to $356,308 thousand in the nine months ended September 30, 2025, compared to $283,216 thousand in the same period of 2024[139] - The ratio of total debt to total capitalization decreased from 13.1% at December 31, 2024, to 11.1% at September 30, 2025[149] - The company had $43.0 million outstanding under the Revolving Credit Facility as of September 30, 2025, with $107.0 million of undrawn capacity[144] Tax and Retention Metrics - The effective tax rate for the three months ended September 30, 2025, was 24.2%, up from 21.7% in the same period of 2024, primarily due to non-deductible acquisition expenses[136] - The net retention on a written basis for the three months ended September 30, 2025, was 72.7%, compared to 67.1% for the same period in 2024[153] Specialty Programs - Specialty programs saw a significant increase in gross written premiums, rising by 52.1% to $82.8 million in Q3 2025 compared to $54.4 million in Q3 2024[119] - Agriculture and credit (re)insurance gross written premiums surged by 886.3% to $168.1 million in Q3 2025 from $17.0 million in Q3 2024[119]

Financial Data and Key Metrics Changes - The company reported an operating income of $44 million and a net income of $45.9 million, translating to $1.05 and $1.10 per diluted share respectively [7][12] - Gross written premiums increased by 52% year-over-year, with net written premiums growing by 64% [7][9] - The combined ratio improved to 89.2%, with a non-catastrophe loss ratio of 60.2% [9][10] - The annualized return on equity reached 19.7%, and earnings grew by over 40% [4][12] Business Line Data and Key Metrics Changes - Five out of nine divisions experienced growth exceeding 25%, with the agriculture unit being the largest contributor [5][16] - The agriculture unit saw significant growth due to demand for reinsurance capacity in dairy and livestock revenue protection [16] - Accident & Health (A&H) grew by 45% year-to-date, focusing on the small employer market and medical cost management [16] - Surety resumed a stronger growth trajectory, increasing by 26% in the last quarter [21][17] Market Data and Key Metrics Changes - The P&C market is showing signs of increased competition, prompting the company to be selective in its underwriting [5][14] - Renewal pricing increased to mid-single digits, with submission growth in the mid-teens [19][65] - The company noted specific pockets of increased auto liability severity inflation, particularly in the construction unit [9][63] Company Strategy and Development Direction - The company continues to execute its Rule Earnings Strategy, focusing on a diversified portfolio that is less exposed to P&C cycles [4][12] - The upcoming Apollo acquisition is expected to close in early 2026, which will enhance specialty capabilities and underwriting talent [12][19] - The company is leveraging technology, including AI-driven analytics, to improve underwriting processes and efficiency [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the competitive P&C market, highlighting the importance of disciplined underwriting [5][14] - The company anticipates uneven quarterly growth due to concentrated renewal cycles in certain divisions [7][9] - Management remains optimistic about the growth outlook, emphasizing the capital-efficient nature of the organization [33][34] Other Important Information - The company completed the monetization of its equity portfolio, realizing gains of $16.3 million, and reinvested proceeds into fixed income securities [11][12] - The debt-to-capital ratio was reported at under 11%, with expectations to remain modest post-acquisition [11][68] Q&A Session Summary Question: Insights on top-line results excluding agriculture - Management noted strong growth in surety and A&H, emphasizing smart terms and conditions in traditional P&C markets [21][23] Question: 2026 guidance on Apollo - Management refrained from providing specifics due to regulatory approval pending but expressed confidence in Apollo's specialty focus [26][27] Question: Capital sources for continued growth - Management indicated that organic capital growth would support growth ambitions, with no immediate capital constraints [32][34] Question: Growth in specialty programs - Management highlighted growth in warranty indemnity and marine programs, with expectations for continued growth in the coming quarters [35][36] Question: Volatility in growth rates - Management explained that certain lines have specific renewal periods, leading to variability in quarterly growth [40][41] Question: Earnings patterns in AG premium - Management confirmed that AG premiums would be earned evenly over the next 12 months [45][46] Question: Retention levels in E&S business - Management clarified that retention levels are influenced by the mix of business, with specific drivers affecting gross to net ratios [53][55] Question: Loss inflation in construction - Management discussed the emergence of severity inflation in construction, paralleling trends seen in auto liability [61][63] Question: Reinsurance market competitiveness - Management acknowledged the favorable reinsurance market for cedents but did not expect significant year-over-year improvements [69][70] Question: Correlation between P&C pricing cycle and captive formation - Management noted that captive growth remains robust even in soft market conditions, providing stability [72][73]

Group 1 - Skyward Specialty Insurance Group Inc. (NASDAQ:SKWD) is considered one of the most undervalued small-cap stocks currently available for investment, with a Buy rating maintained by Citizens JMP analyst Matthew Carletti and a price target set at $70 [1] - Keefe Bruyette analyst Meyer Shields updated the price target for Skyward Specialty Insurance Group to $64 from $63 while maintaining an Outperform rating on October 6 [2] - Janney Montgomery Scott initiated coverage on Skyward Specialty Insurance Group with a Buy rating and a fair value estimate of $60, highlighting the company's pending acquisition of Apollo Group and its "Rule Our Niche" strategy as key factors for enhancing competitive position [3] Group 2 - Skyward Specialty Insurance Group Inc. operates as a specialty insurance company providing commercial property and casualty solutions predominantly in the US, with a focus on various industry solutions including healthcare professional liability and specialty property and liability [4]