Leading insurance stocks Kinsale Capital Group (KNSL) broke new ground and earned a spot on the IBD Breakout Stock Index. And it is in good company.
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The KNSL stock joins a recent basket of stocks added to the index, which is tracked by the IBD Breakout Opportunities ETF (BOUT).
Other defensive names added to the list include food giants Congra Brands (CAG) and Campbell’s Soup (CPB).
Medical industry stocks Intra-cellular therapy (ITCI), Merit Medical System (MMSI) and Ensign Group (ENSG) has also listed.
Finally, energy is widely represented, including industrial giants Exxon Mobil (XOM), Bp (BP), Danbury (DEN) and Shell (Shell).
Property-casualty carriers insure numerous risks
Kinsale Capital offers casualty and specialty casualty, property, professional lines and transportation insurance products. Its casualty insurance covers everything from marijuana to the construction industry.
Specialty casualty handles the energy, entertainment, environmental, and life sciences industries and product recall and product liability.
Its professional lines oversee health and public entity and professional liability coverage while its transportation unit insures aviation, auto and marine businesses.
KNSL stock ranks first among 62 constituents in the Insurance-Property/Casualty/Title group, ranking 106th out of 197 IBD industry groups.
Insurance stocks form another foundation
The insurance stock is forming a cup base with a 337.22 buy point arising from the handle of a cup-y-handle base.
The grounding began on Feb. 16 after Kinsale reported better-than-expected Q4 earnings and sales. The next day the insurance stock rose 14.5% on heavy volume.
But KNSL then traded choppy and rolled over, falling below its 50-day moving average.
The stock retook the 50-day line in March and has been climbing steadily to the right of a cup base since then. About 7% from share buy points.
Strong insurance stock earnings growth
The insurance stock posted a respectable 48% earnings and 32% sales increase in the fourth quarter, continuing a history of solid performance.
FactSet estimates earnings of $2.20 per share in Q1 2023, which would mark 35% year-over-year growth. Full-year EPS is forecast to grow about 24% to $9.66 in 2023 and about 20% to $11.55 in 2024.
Q4 gross premiums increased 45% to $295.5 million. FactSet expects premiums of $304.3 million in the first quarter.
Full-year 2022 gross premiums likewise rose 44% to $1.1 billion, compared to an estimate of $1.338 billion in 2023.
Return on equity increased to 25% in 2021 from 20.8%. The CAN SLIM investment strategy looks for companies with a minimum ROE of 17%, the higher the better.
Kinsale reported Q1 earnings on April 27.
The insurance stock has an impressive 97 out of 99 EPS ratings and a healthy stability rating of 9. The IBD Stability Rating measures 3 to 5 years of earnings history on a scale of 1 to 99, with 1 being the best. The lower the number, the more stable the earning rate.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stock Index. Like other index ETFs, this fund allows you to invest in the entire index in addition to or instead of buying individual stocks. Learn more about ETFs and innovator funds here.
Follow Kimberly Koenig on Twitter for more stock news @IBD_KKoenig.
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