3 Stocks Pushing The Insurance Industry Lower

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The Insurance industry as a whole closed the day down 0.1% versus the S&P 500, which was unchanged. Laggards within the Insurance industry included Kingstone Companies ( KINS), down 1.6%, First Acceptance ( FAC), down 7.4%, Investors Title ( ITIC), down 2.1%, 1347 Property Insurance Holdings ( PIH), down 5.6% and State Auto Financial ( STFC), down 1.7%.

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

State Auto Financial ( STFC) is one of the companies that pushed the Insurance industry lower today. State Auto Financial was down $0.38 (1.7%) to $21.14 on light volume. Throughout the day, 21,731 shares of State Auto Financial exchanged hands as compared to its average daily volume of 31,900 shares. The stock ranged in price between $21.10-$21.58 after having opened the day at $21.33 as compared to the previous trading day's close of $21.52.

State Auto Financial Corporation, through its subsidiaries, is engaged in writing personal, business, and specialty insurance products. The company operates through four segments: Personal insurance, Business insurance, Specialty insurance, and Investment operations. State Auto Financial has a market cap of $883.0 million and is part of the financial sector. Shares are up 1.7% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate State Auto Financial a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates State Auto Financial as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on STFC go as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • STATE AUTO FINANCIAL CORP has improved earnings per share by 34.7% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, STATE AUTO FINANCIAL CORP increased its bottom line by earning $1.49 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $1.49).
  • The gross profit margin for STATE AUTO FINANCIAL CORP is currently extremely low, coming in at 11.12%. Regardless of STFC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, STFC's net profit margin of 9.30% compares favorably to the industry average.
  • Net operating cash flow has significantly decreased to $2.30 million or 71.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: State Auto Financial Ratings Report

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At the close, Investors Title ( ITIC) was down $1.40 (2.1%) to $66.02 on heavy volume. Throughout the day, 13,525 shares of Investors Title exchanged hands as compared to its average daily volume of 6,300 shares. The stock ranged in price between $65.92-$66.90 after having opened the day at $66.90 as compared to the previous trading day's close of $67.42.

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 $140.2 million and is part of the financial sector. Shares are down 15.0% 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 7.9%. 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 5.69% 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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Kingstone Companies ( KINS) was another company that pushed the Insurance industry lower today. Kingstone Companies was down $0.10 (1.6%) to $6.10 on light volume. Throughout the day, 4,579 shares of Kingstone Companies exchanged hands as compared to its average daily volume of 10,500 shares. The stock ranged in price between $6.09-$6.12 after having opened the day at $6.11 as compared to the previous trading day's close of $6.20.

Kingstone Companies, Inc., through its subsidiary, Kingstone Insurance Company, underwrites property and casualty insurance products to small businesses and individuals in New York. Kingstone Companies has a market cap of $44.9 million and is part of the financial sector. Shares are down 15.3% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Kingstone Companies a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Kingstone Companies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from TheStreet Ratings analysis on KINS go as follows:

  • The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 34.4%. 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.
  • KINS 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 71.2% when compared to the same quarter one year prior, rising from $0.19 million to $0.33 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • KINGSTONE COS INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KINGSTONE COS INC increased its bottom line by earning $0.51 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.68 versus $0.51).

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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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