KINS

Kingstone is a clean turnaround now working at a very cheap multiple. After three straight loss years (FY2021 -$7.4M, FY2022 -$22.5M, FY2023 -$6.2M), the insurer swung positive in FY2024 (+$18.4M) and more than doubled that in FY2025 to $40.8M net income on $215M revenue (+38.5% YoY). Net margin is 19.0%, ROE a standout 33.2%, and diluted EPS jumped 94.6% to $2.88. Operating cash flow of $75.9M dwarfs the tiny $2.8M capex and $1.4M in dividends, so the earnings are cash-real, not accrual mirages. Stockholders' equity grew 84% to $123M and retained earnings inflected from near-zero to $34.6M, repairing a balance sheet that the loss years had drained. Against all this the stock trades at just 7.0x earnings and 1.4x sales — a multiple that prices in stagnation, not a business compounding book value at 30%+.

The MD&A explains the earnings power: KICO writes one-year personal-lines and commercial-auto policies, invests the float, and in 2024 was the 12th-largest homeowners writer in New York. The FY2025 revenue surge reflects a hard pricing market in NY homeowners plus growing net investment income on a larger float. Leverage of 2.69x liabilities/equity is normal for a P&C insurer and is actually declining in absolute debt terms — long-term debt fell 27% to $3.1M and the current portion fell 81% to $1.3M, so this is a lightly-levered balance sheet by insurance standards.