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Kingsway Financial Services Insider Buys Shares

- By Kyle Ferguson

Joseph Stilwell purchased 1,148,263 shares of Kingsway Financial Services (KFS) on Sept. 30 for $5.74 per share, according to a Form 4 filing with the Securities and Exchange Commission. Stilwell now owns 3,772,218 shares of Kingsway Financial Services, which represents 19.01% of the company's shares outstanding.

Kingsway Financial Services has a market cap of $113.9 million, an enterprise value of $117.35 million, a price-book (P/B) ratio of 3.34 and a Yacktman rate of return of 260.95%.

Kingsway Financial was incorporated under the business corporations act in Ontario on Sept. 19, 1989. Kingsway Financial is a Canadian holding company with operating subsidiaries located in the U.S. The company operates as a merchant bank primarily engaged, through its subsidiaries, in the property and casualty insurance business. Kingsway conducts its business through two segments: Insurance Underwriting and Insurance Services.

According to GuruFocus, Kingsway Financial Services has a cash to debt ratio of 1.10 and an equity to asset ratio of 0.17. Its Piotroski F-Score of 2 implies a poor business situation. The company also has a 2 of 10 profitability and growth rating, with an operating margin of -7.28%, a net-margin of -3.25%, a ROE of -12.69% and EBITDA growth of -53.90%.

According to GuruFocus, Kingsway Financial Services has three severe warning signs that investors should pay attention to.

  • The company has a low Piotroski F-Score.
  • Kingsway Financial's operating margin has been in a 5-year decline at an average rate of -47.9% per year.
  • Kingsway Financial's per share revenue has been in decline for the last 5 years at an average rate of -2.50%.

Joseph Stilwell is an independent director at Kingsway Financial. He has over 20 years of experience managing investment funds. Stilwell holds a Bachelor of Science in economics that he received from the Wharton School at the University of Pennsylvania in 1983.

Below is a Peter Lynch chart that shows Kingsway is trading below its intrinsic value.

Disclosure: Author does not own any shares of this company.

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This article first appeared on GuruFocus.