Growth stock Kinsale Capital Group broke out of a cup base with a buy point of 337.12 and is an IBD 50 Stock To Watch. Shares have gained over 10% since the breakout. but support at the 10-week moving average now offers an alternate entry.
The stock has gained over 45% for the year, handily beating the S&P 500's gain of about 14%. Shares fell after second-quarter earnings in late July, but rebounded from the 10-week and 50-day lines to hit an all-time high on Wednesday. The rebound off the 10-week line sets up a buy area from about 370 to 407.
Kinsale has seen steady sales and earnings growth over the past seven quarters. Sales grew 61% in the last quarter to $295.8 million, while earnings per share grew 50% to $2.88. The company also announced a dividend of 12 cents per share payable on Sept. 12 to shareholders on record as of Aug. 29.
Wall Street estimates 45% earnings growth for 2023.
Growth Stock Kinsale's Technical Ratings Shine
The growth stock has near-perfect technical ratings. The Composite Rating and EPS Rating are 99, the highest possible, while the RS Rating is not far behind at 92. KNSL ranks second in the insurance and property, casualty and title group, which holds 85th place among IBD's 197 industry groups.
Kinsale is also on the Long Term Leaders list of growth stocks. That makes another pullback to the 10-week line a potential entry point for the stock since long term leaders tend to rally after brief periods of shakeouts.
Kinsale focuses on specialty insurance products to cover small and midsize business risk through excess and surplus lines. Its specialty insurance products are available for construction, import, oil and gas, real estate development, warehouses and other businesses.
The growth stock was originally listed on the Nasdaq when it went public in 2016. But it moved from the Nasdaq and started trading on the New York Stock Exchange on Jan. 3, 2022, under the same ticker.
More funds have been buying shares of KNSL stock over the past eight quarters. 57% of outstanding shares have institutional sponsorship. Invesco Discovery Fund (OPOCX) is one of the firms that hold shares of Kinsale.
Exchange traded funds hold the stock as well. The SPDR S&P 400 Mid Cap ETF Trust and the iShares Core S&P 500 Mid-Cap ETF hold shares of KNSL.
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