In This Article:
Kingstone Companies Inc (NASDAQ:KINS), which is in the insurance business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqCM. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Kingstone Companies’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Kingstone Companies
Is Kingstone Companies still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.75% above my intrinsic value, which means if you buy Kingstone Companies today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $16, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Kingstone Companies’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Kingstone Companies?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to more than double in the upcoming, the future appears to be extremely bright for Kingstone Companies. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? KINS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on KINS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.