KNSL - Kinsale Capital upgraded to buy at Compass Point on robust valuation metrics

Compass Point analyst Casey Alexander upgraded shares of Kinsale Capital Group ( NYSE: KNSL ) on Tuesday to Buy due to the property and casualty insurer's strong valuation metrics when compared with industry averages.

The company's strong valuation has been supported by a "long-term underwriting track record with combined ratios well below industry averages," the analyst wrote in a note.

Bear in mind, though, it's is boosting its exposure to property in a move that could "increase the volatility of earnings, he added. Last week, Kinsale ( KNSL ) acquired property adjacent to its headquarters in Richmond, Virginia for $76.2M.

Overall, "we judge the risk-reward proposition for KNSL investors is now favorable," the note read.

The Quant system, however, flagged KNSL's Valuation Grade as an "F," with some of the poorest marks in  adjusted price-to-earnings, price-to-book and price-to-sales. And given KNSL's over 16% climb year-to-date, SA contributor Weighing Machine thinks "competitive pressures will lead to lower returns on capital and a much lower multiple of earnings and book value."

Previously, (Dec. 12) Kinsale, Palomar ( PLMR ) rated Hold as Jefferies starts coverage of P&C insurers .

For further details see: