Should Value Investors Consider Kingstone (KINS) Stock?

Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?

One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Kingstone Companies, Inc. (NASDAQ:KINS) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:

PE Ratio

A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.

On this front, Kingstone has a trailing twelve months PE ratio of 19, as you can see below:

This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 21.5. Moreover, the current level is fairly below the highs for this stock, suggesting it might be a good entry point.

Further, the stock’s PE compares vastly favorably with the industry’s trailing twelve months PE ratio, which stands at 29.7. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.

We should also point out that Kingstone has a forward PE ratio (price relative to this year’s earnings) of 18.5 – which is lower than the current level. So it is fair to say that a slightly more value-oriented path may be ahead for Kingstone stock in the near term too.

PS Ratio

Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.

Right now, Kingstone has a P/S ratio of about 2.4. This is lower than the S&P 500 average, which comes in at 3.4 right now.

KINS is actually in the higher zone of its trading range in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.

Broad Value Outlook

In aggregate, Kingstone currently has a Zacks Value Style Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Kingstone a solid choice for value investors, and some of its other key metrics make this pretty clear too.

What About the Stock Overall?

Though Kingstone might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of C and a Momentum score of F. This gives KINS a Zacks VGM score—or its overarching fundamental grade—of C. (You can read more about the Zacks Style Scores here >>)

Meanwhile, the company’s recent earnings estimates have been trending upwards lately. The current year and next has seen one estimates go higher in the past sixty days compared to none lower.

As a result, the current year consensus estimate has inched up 5% in the past two months, while the next year estimate has increased 15.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:

Kingstone Companies, Inc Price and Consensus

This positive trend signifies bullish analyst sentiment, and its Zacks Rank #1 (Strong Buy) indicates robust fundamentals and expectations of outperformance in the near term.

Bottom Line

Kingstone is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. With a formidable industry rank (among the Top 29% out of more than 250 industries) and strong Zacks Rank, Kingstone looks like a strong value contender. In fact, over the past six months, its industry has clearly outperformed the broader market, as you can see below:

So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.

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