Antrim is discontinuing ongoing research coverage of Lincoln Electric and Kinsale Capital Group at this time. Subscribers can access our final thoughts on the names using the links below:
Please use the following link to download our thoughts on KNSL's Q3 report:
Please follow the link to download our thoughts in reaction to the company's Q1 report, and management commentary.
In this month's issue of "Short Shrift," (the first of the new year) please find our thoughts on recent strength in shares of BLDP, weakness in KNSL, and the announcement that PSA has added two new independent trustees to its board of directors.
On Thursday October 29th, after market close, Kinsale reported operating earnings of $0.42, $0.35 below the consensus expectation of $0.77. Download our report to find our thoughts on the Kinsale results, and management commentary.
In this month's installment of "Short Shrift," we provide subscribers with updates on short ideas under our coverage, as well as the results of our ongoing diligence work. In this issue, QSR, KNSL, and SNA found themselves in the headlines. As well, Antrim has updated diligence work on KNSL and SNA.
Click the image or the link below for the first installment of "Short Shrift," which is Antrim's monthly update note on the short ideas under our coverage. In this issue, we discuss QSR, which has reported earnings since our 8/2 initiation, and KNSL, which has reported earnings, raised equity, and lost a chief claims officer since our initiation on July 26th.
We've learned some lessons as we've rolled out coverage at Antrim. Some of our constructive feedback has been easy to implement. Like, why on earth don't Antrim Initiations include an "Issuer Info" section on the very first page? Well now they do. With this post, I'm re-publishing Antrim's previous initiations on Shorts: KNSL, QSR, and TDG with a little formatting change, and the new issuer info section, to make them slightly more accessible. There has been no change to substance or content of the reports.
Download our KNSL Initiation >>
Download our QSR Initiation >>
On Thursday, July 30th, after market close, KNSL reported Q2 EPS of $0.84 per share, $0.15 better than consensus’ (and Antrim’s) estimate of $0.69, on a 41% y/y increase in GWP.
Kinsale Capital Group is a mid-cap specialty insurer operating in the Excess and Surplus (“E&S”) lines subsegment of the broader Property and Casualty (“P&C”) insurance industry. The company has generated an ample, “mid-teens” return on equity, and grown revenue at an annual CAGR of 34% over the past three years. That success, together with a float-limiting insider ownership of 7.31% of the outstanding shares, has engendered a committed shareholder base of long-only, “true believers” who have held Kinsale as it has earned inclusion in the S&P Small Cap 600 Index, and rocketed to a valuation in excess of 9x tangible book on the back of new passive shareholder ownership amounting to 27% of the float. This “single stock valuation bubble” has come about just as the coronavirus pandemic and lockdown-induced recession threaten to produce decelerating revenue growth, adverse reserve development, and investment portfolio losses.