3 Stocks Pushing The Insurance Industry Lower

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The Insurance industry as a whole closed the day down 0.5% versus the S&P 500, which was down 0.5%. Laggards within the Insurance industry included Independence ( IHC), down 1.8%, Kingsway Financial Services ( KFS), down 1.7%, Crawford & Company ( CRD.A), down 2.2%, Investors Title ( ITIC), down 2.1% and Atlas Financial Holdings ( AFH), down 4.5%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Investors Title ( ITIC) is one of the companies that pushed the Insurance industry lower today. Investors Title was down $1.52 (2.1%) to $69.10 on heavy volume. Throughout the day, 17,419 shares of Investors Title exchanged hands as compared to its average daily volume of 5,700 shares. The stock ranged in price between $68.47-$70.30 after having opened the day at $68.75 as compared to the previous trading day's close of $70.62.

Investors Title Company, through its subsidiaries, provides title insurance to residential, institutional, commercial, and industrial properties in the United States. Investors Title has a market cap of $141.3 million and is part of the financial sector. Shares are down 14.3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Investors Title as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on ITIC go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.1%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ITIC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • INVESTORS TITLE CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, INVESTORS TITLE CO increased its bottom line by earning $7.08 versus $5.25 in the prior year.
  • The share price of INVESTORS TITLE CO has not done very well: it is down 5.26% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, INVESTORS TITLE CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

You can view the full analysis from the report here: Investors Title Ratings Report

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At the close, Kingsway Financial Services ( KFS) was down $0.11 (1.7%) to $6.38 on light volume. Throughout the day, 3,006 shares of Kingsway Financial Services exchanged hands as compared to its average daily volume of 32,400 shares. The stock ranged in price between $6.38-$6.53 after having opened the day at $6.49 as compared to the previous trading day's close of $6.49.

Kingsway Financial Services Inc., through its subsidiaries, is engaged in the provision of property and casualty insurance products for individuals and businesses in the United States. The company operates in two segments, Insurance Underwriting and Insurance Services. Kingsway Financial Services has a market cap of $105.2 million and is part of the financial sector. Shares are up 66.4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Kingsway Financial Services as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and disappointing return on equity.

Highlights from TheStreet Ratings analysis on KFS go as follows:

  • Currently the debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Insurance industry and the overall market, KINGSWAY FINANCIAL SVCS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Insurance industry average. The net income increased by 19.5% when compared to the same quarter one year prior, going from -$13.70 million to -$11.02 million.
  • KINGSWAY FINANCIAL SVCS INC has improved earnings per share by 35.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, KINGSWAY FINANCIAL SVCS INC continued to lose money by earning -$3.17 versus -$3.95 in the prior year.
  • 43.68% is the gross profit margin for KINGSWAY FINANCIAL SVCS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -23.71% is in-line with the industry average.

You can view the full analysis from the report here: Kingsway Financial Services Ratings Report

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Independence ( IHC) was another company that pushed the Insurance industry lower today. Independence was down $0.24 (1.8%) to $13.33 on light volume. Throughout the day, 8,696 shares of Independence exchanged hands as compared to its average daily volume of 15,200 shares. The stock ranged in price between $13.18-$13.54 after having opened the day at $13.54 as compared to the previous trading day's close of $13.57.

Independence Holding Company provides life and health insurance products in the United States, the Virgin Islands, and Puerto Rico. Independence has a market cap of $232.1 million and is part of the financial sector. Shares are up 0.6% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Independence as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

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Highlights from TheStreet Ratings analysis on IHC go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.1%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • IHC's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 38.62% is the gross profit margin for INDEPENDENCE HOLDING CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 2.62% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • INDEPENDENCE HOLDING CO's earnings per share declined by 19.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, INDEPENDENCE HOLDING CO reported lower earnings of $0.78 versus $1.10 in the prior year.

You can view the full analysis from the report here: Independence Ratings Report

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