Kingsway Financial Services Inc. (NYSE:KFS) CEO John Taylor Maloney Fitzgerald has recently increased his stake in the company through a series of transactions. On September 30, 2024, Fitzgerald purchased 299 shares of Kingsway Financial's common stock at a price of $8.34 per share, totaling an investment of $2,493.
The shares were acquired under the Kingsway America Inc. Employee Share Purchase Plan (ESPP), which allows eligible employees to contribute up to 5% of their adjusted salary. The company matches 100% of such contributions, which are then used to purchase Kingsway Financial shares on the open market. This particular acquisition adds to Fitzgerald's substantial holdings in the company, which includes 400,000 shares of restricted stock granted on March 31, 2021.
Investors often monitor insider transactions as they can provide insights into an executive's confidence in the company's future prospects. The purchase by Fitzgerald, who holds the dual roles of President and CEO, might be interpreted as a positive signal regarding Kingsway Financial's outlook.
Kingsway Financial, headquartered in Itasca, Illinois, operates within the fire, marine, and casualty insurance sector. The company's stock is traded under the ticker symbol KFS on the New York Stock Exchange.
In other recent news, Kingsway Financial Services Inc. has broadened its portfolio through the acquisition of Image Solutions LLC, a North Carolina-based IT managed services provider. The deal was valued at $19.5 million and was funded through available cash and $7.75 million in debt financing. The acquisition is anticipated to add $9.8 million in annual unaudited revenue and $3.1 million in annual unaudited adjusted EBITDA to Kingsway's financials.
This recent development is expected to be immediately accretive to Kingsway's earnings. Davide Zanchi, Kingsway's Operator-in-Residence, is set to take over as CEO of Image Solutions, while the company's founder, Garrett Williams, will remain as an advisor during the transition period.
The acquisition of Image Solutions, which has approximately 85% recurring revenue, low customer churn, and strong margins, aligns with Kingsway's strategic direction. The deal was structured as a purchase of all issued and outstanding membership interests in Image Solutions. Avidbank provided the financing for the acquisition, with Holland & Knight LLP acting as legal counsel to Kingsway.
InvestingPro Insights
To complement the recent insider purchase by CEO John Taylor Maloney Fitzgerald, let's delve into some key financial metrics and insights for Kingsway Financial Services Inc. (NYSE:KFS).
According to InvestingPro data, Kingsway Financial has a market capitalization of $229.44 million, positioning it as a small-cap company in the insurance sector. The company's revenue for the last twelve months as of Q2 2024 stands at $106.42 million, with a modest revenue growth of 0.51% over the same period.
One of the InvestingPro Tips highlights that Kingsway Financial's stock price often moves in the opposite direction of the market. This characteristic could be of interest to investors looking for potential hedging opportunities or those seeking to diversify their portfolio with stocks that have low correlation to broader market movements.
Another notable InvestingPro Tip reveals that Kingsway Financial is not profitable over the last twelve months. This is reflected in the negative P/E ratio of -54.07 for the last twelve months as of Q2 2024. Despite this, the company has shown a strong return over the last five years, which aligns with CEO Fitzgerald's continued investment in the company's stock.
It's worth noting that Kingsway Financial is trading at a high Price / Book multiple of 11.28, which may indicate that the market has high expectations for the company's future performance or that the stock might be overvalued compared to its book value.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 11 more InvestingPro Tips available for Kingsway Financial, which could provide a more nuanced understanding of the company's financial health and market position.
The recent insider purchase by CEO Fitzgerald, coupled with these financial metrics, presents a complex picture of Kingsway Financial. While the company faces profitability challenges, its long-term performance and management's confidence, as evidenced by insider buying, suggest potential for future growth.
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