Kingsway Financial Services (KFS) Targets Aggressive Growth Through Strategic Acquisitions
In its second quarter 2025 investor letter, Alphyn Capital Management highlighted stocks such as Kingsway Financial Services Inc. (NYSE:KFS). Headquartered in Chicago, Illinois, Kingsway Financial Services Inc. (NYSE:KFS) engages in extended warranty and business services. The one-month return of Kingsway Financial Services Inc. (NYSE:KFS) was 6.91%, and its shares gained 73.72% of their value over the last 52 weeks. On July 10, 2025, Kingsway Financial Services Inc. (NYSE:KFS) stock closed at $14.54 per share, with a market capitalization of $413.374 million.
Alphyn Capital Management stated the following regarding Kingsway Financial Services Inc. (NYSE:KFS) in its second quarter 2025 investor letter:
"Kingsway Financial Services Inc.'s (NYSE:KFS) shares spent most of the past year moving sideways, which is unsurprising for a roughly $400 million market cap company that receives little sell-side coverage and whose value depends more on future acquisition-driven growth than on reported earnings today. Execution across the portfolio has been uneven. Acquisitions such as Ravix and SPI have performed well, while CSuite has proven difficult, and Secure Nursing has faced soft demand for travel nurses and wage pressure, resulting in revenue remaining flat and margins under strain as the industry normalizes following the pandemic. At the May Investor Day, management reaffirmed its goal of two to three acquisitions a year at 5-7x EBITDA on companies earning $1.5 - $3 million and walked through an operating playbook for their most recent acquisition Buds Plumbing that showed how pricing, service mix expansion, and bolt-on M&A can double profits within three years. Two weeks later, Kingsway closed a $15.7 million PIPE at $11.75 per share, lifting its acquisition cadence target to three to five deals per year. The share price has run up on that news and could be volatile until the playbook is proven; but if management executes on a handful of high quality acquisitions a year and brings solid operational discipline to formerly lifestyle family businesses, the earnings base could expand meaningfully over the next few years."
A service technician with a tool belt, inspecting an HVAC unit in a customer's home.
Kingsway Financial Services Inc. (NYSE:KFS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held Kingsway Financial Services Inc. (NYSE:KFS) at the end of the first quarter, compared to 5 in the last quarter. While we acknowledge the potential of KFS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Kingsway Financial Services Inc. (NYSE:KFS) and shared Greenhaven Road Capital's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
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