3 Stocks Pushing The Insurance Industry Lower

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The Insurance industry as a whole closed the day down 0.7% versus the S&P 500, which was down 1.3%. Laggards within the Insurance industry included National Security Group ( NSEC), down 2.1%, Life Partners Holdings ( LPHI), down 11.8%, Oxbridge Re Holdings ( OXBR), down 1.9%, Kingsway Financial Services ( KFS), down 4.3% and Independence ( IHC), down 1.6%.

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

Independence ( IHC) is one of the companies that pushed the Insurance industry lower today. Independence was down $0.22 (1.6%) to $13.30 on light volume. Throughout the day, 6,429 shares of Independence exchanged hands as compared to its average daily volume of 10,100 shares. The stock ranged in price between $13.29-$13.38 after having opened the day at $13.32 as compared to the previous trading day's close of $13.52.

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 $235.7 million and is part of the financial sector. Shares are down 3.1% year-to-date as of the close of trading on Monday.

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

Highlights from TheStreet Ratings analysis on IHC go as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Insurance industry average. The net income increased by 29.4% when compared to the same quarter one year prior, rising from $3.64 million to $4.71 million.
  • IHC's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 41.17% 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 3.63% trails the industry average.
  • 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. 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 has improved earnings per share by 28.6% in the most recent quarter compared to 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, 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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At the close, Kingsway Financial Services ( KFS) was down $0.25 (4.3%) to $5.57 on light volume. Throughout the day, 10,365 shares of Kingsway Financial Services exchanged hands as compared to its average daily volume of 23,100 shares. The stock ranged in price between $5.50-$5.64 after having opened the day at $5.51 as compared to the previous trading day's close of $5.82.

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 $114.7 million and is part of the financial sector. Shares are up 4.9% 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 unimpressive growth in net income, generally high debt management risk and poor profit margins.

Highlights from TheStreet Ratings analysis on KFS 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 Insurance industry. The net income has significantly decreased by 465.8% when compared to the same quarter one year ago, falling from $1.88 million to -$6.87 million.
  • The debt-to-equity ratio of 1.26 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The gross profit margin for KINGSWAY FINANCIAL SVCS INC is currently lower than what is desirable, coming in at 34.90%. Regardless of KFS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, KFS's net profit margin of -15.09% significantly underperformed when compared to the industry average.
  • 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.
  • KINGSWAY FINANCIAL SVCS INC's earnings per share declined by 5.1% in the most recent quarter compared to 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, KINGSWAY FINANCIAL SVCS INC continued to lose money by earning -$3.17 versus -$3.95 in the prior year.

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

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Life Partners Holdings ( LPHI) was another company that pushed the Insurance industry lower today. Life Partners Holdings was down $0.03 (11.8%) to $0.19 on heavy volume. Throughout the day, 249,301 shares of Life Partners Holdings exchanged hands as compared to its average daily volume of 80,500 shares. The stock ranged in price between $0.18-$0.21 after having opened the day at $0.20 as compared to the previous trading day's close of $0.22.

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 $7.1 million and is part of the financial sector. Shares are down 67.7% 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 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:

  • 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.
  • LPHI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 87.37%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • LIFE PARTNERS HOLDINGS 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 two years. During the past fiscal year, LIFE PARTNERS HOLDINGS INC continued to lose money by earning -$0.13 versus -$0.16 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Financial Services industry. The net income increased by 214.8% when compared to the same quarter one year prior, rising from -$0.94 million to $1.08 million.
  • 44.41% is the gross profit margin for LIFE PARTNERS HOLDINGS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 20.53% significantly outperformed against the industry average.

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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