3 Stocks Pushing The Insurance Industry Lower

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The Insurance industry as a whole closed the day down 1.3% versus the S&P 500, which was down 1.5%. Laggards within the Insurance industry included Life Partners Holdings ( LPHI), down 9.2%, First Acceptance ( FAC), down 2.3%, Kingsway Financial Services ( KFS), down 2.8%, Hallmark Financial Services ( HALL), down 1.6% and Investors Title ( ITIC), down 1.6%.

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

Hallmark Financial Services ( HALL) is one of the companies that pushed the Insurance industry lower today. Hallmark Financial Services was down $0.16 (1.6%) to $10.16 on light volume. Throughout the day, 16,250 shares of Hallmark Financial Services exchanged hands as compared to its average daily volume of 27,500 shares. The stock ranged in price between $10.10-$10.31 after having opened the day at $10.21 as compared to the previous trading day's close of $10.32.

Hallmark Financial Services, Inc., an insurance holding company, markets, distributes, underwrites, and services property/casualty insurance products to businesses and individuals in the United States. The company operates in Standard Commercial, Specialty Commercial, and Personal segments. Hallmark Financial Services has a market cap of $203.0 million and is part of the financial sector. Shares are up 16.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Hallmark Financial Services a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Hallmark Financial Services as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on HALL go as follows:

  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • 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 152.4% when compared to the same quarter one year prior, rising from -$3.15 million to $1.65 million.
  • Although HALL's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average.
  • HALLMARK FINANCIAL SERVICES reported significant earnings per share improvement 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HALLMARK FINANCIAL SERVICES increased its bottom line by earning $0.43 versus $0.18 in the prior year. For the next year, the market is expecting a contraction of 30.2% in earnings ($0.30 versus $0.43).
  • The revenue fell significantly faster than the industry average of 23.9%. Since the same quarter one year prior, revenues fell by 18.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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

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At the close, Kingsway Financial Services ( KFS) was down $0.18 (2.8%) to $6.22 on average volume. Throughout the day, 37,828 shares of Kingsway Financial Services exchanged hands as compared to its average daily volume of 35,700 shares. The stock ranged in price between $6.22-$6.40 after having opened the day at $6.40 as compared to the previous trading day's close of $6.40.

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 $99.7 million and is part of the financial sector. Shares are up 64.1% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Kingsway Financial Services as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from TheStreet Ratings analysis on KFS go as follows:

  • The debt-to-equity ratio of 1.38 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
  • 44.12% is the gross profit margin for KINGSWAY FINANCIAL SVCS INC which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -9.71% is in-line with the industry average.
  • KINGSWAY FINANCIAL SVCS INC reported significant earnings per share improvement 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.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Insurance industry average. The net income increased by 52.2% when compared to the same quarter one year prior, rising from -$10.29 million to -$4.92 million.

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

Life Partners Holdings ( LPHI) was another company that pushed the Insurance industry lower today. Life Partners Holdings was down $0.19 (9.2%) to $1.87 on heavy volume. Throughout the day, 186,841 shares of Life Partners Holdings exchanged hands as compared to its average daily volume of 20,000 shares. The stock ranged in price between $1.87-$2.10 after having opened the day at $2.04 as compared to the previous trading day's close of $2.06.

Life Partners Holdings, Inc., through its subsidiary, Life Partners, Inc., operates in the secondary market for life insurance worldwide. It facilitates the sale of life settlements between sellers and purchasers, but does not take possession or control of the policies. Life Partners Holdings has a market cap of $37.1 million and is part of the financial sector. Shares are up 11.8% year-to-date as of the close of trading on Monday.

TheStreet Ratings rates Life Partners Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LPHI go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Financial Services industry. The net income has significantly decreased by 203.4% when compared to the same quarter one year ago, falling from $1.68 million to -$1.74 million.
  • 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 Diversified Financial Services industry and the overall market, LIFE PARTNERS HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of LIFE PARTNERS HOLDINGS INC has not done very well: it is down 11.22% 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • LIFE PARTNERS HOLDINGS INC 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, LIFE PARTNERS HOLDINGS INC continued to lose money by earning -$0.13 versus -$0.16 in the prior year.
  • Net operating cash flow has significantly increased by 61.65% to -$1.10 million when compared to the same quarter last year. In addition, LIFE PARTNERS HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 0.71%.

You can view the full analysis from the report here: Life Partners Holdings 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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