Wayman Value Investing - New Stock Recommendation - November 2023
A new position is being added to the Wayman portfolio
###New Position###
Kinsale Capital Group (KNSL)
Recent Price: 368.46
Market Cap: 8.54B
P/FCF: 11.54
P/E: 31.61
P/S: 7.73
LT Debt/Eq: 0.20
Projected 4yr FCF: 4.54B
Wayman Portfolio Tier: Gather
Kinsale Capital Group, a specialized insurer in the U.S., offers a range of property and casualty insurance products. Their commercial lines span construction, small businesses, excess and general casualty, commercial property, allied health, life sciences, energy, environmental, health care, inland marine, public entity, and commercial insurance, including product, professional, and management liability coverage. Operating nationwide and in territories like the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, Kinsale markets and sells its insurance through an extensive network of independent brokers. Founded in 2009, the company is headquartered in Richmond, Virginia.
Shares of Kinsale Capital Group, Inc. (KNSL) have surged 27% over the past year, surpassing the industry's 9% gain. Despite a decline in the Finance sector, Kinsale has exhibited strength. The gain is attributed to a focus on the excess and supply (E&S) market, effective underwriting, improved investment portfolio, prudent capital deployment, and positive growth projections.
The insurer has consistently outperformed earnings estimates. The company anticipates continued premium growth in the E&S market, aiming for a sixth consecutive year of double-digit industry-wide E&S premium growth in 2023.
Kinsale's proprietary technology platform is expected to provide a competitive edge, supporting scalability and improved expense ratios. The company's annualized operating return on equity for the nine months ending Sep 30, 2023, was 32%, reflecting profitable growth and rate increases. Kinsale aims to maintain operating return on equity in the mid-teens range for the long term.
Kinsale offers attractive value, growth, and promising momentum.
Please keep in mind that while some investors might rely on market catalysts when considering what new positions to take, Wayman considers its style to be “catalyst-free investing.” Our reason for purchasing will always be based on our calculations which show a business is worth far more than where the market is pricing it. - Frank Memcaj, Founder of Wayman Value Investing