Latest news with #KingswayFinancial
Yahoo
a day ago
- Business
- Yahoo
Kingsway Financial Services Inc. (KFS): A Bull Case Theory
We came across a bullish thesis on Kingsway Financial Services Inc. (KFS) on Andvsri's Substack. In this article, we will summarize the bulls' thesis on KFS. Kingsway Financial Services Inc. (KFS)'s share was trading at $12.86 as of 30th May. A professional insurance agent at work in a modern office, representing the company's independent agents. Kingsway Financial Services (KFS) has undergone a significant transformation from a troubled Canadian insurance company into a unique, publicly traded search fund platform. After years of poor management and failed investments, activist investor Joseph Stilwell took control and installed Larry Swets as CEO to utilize the company's substantial net operating losses (NOLs). However, Swets' tenure saw limited success until the 2016 acquisition of Argo Management Group and its founder, J.T. Fitzgerald. In 2018, Fitzgerald became CEO and began a comprehensive cleanup, exiting legacy assets, selling the insurance business, reincorporating in the U.S., and dramatically reducing debt. Under Fitzgerald, Kingsway launched the Kingsway Search Accelerator (KSX) to institutionalize the search fund model. Search funds—vehicles where entrepreneurs acquire and operate small businesses—have historically generated strong returns, and Kingsway's platform improves on the model with superior capital access, operational infrastructure, and a selective pipeline. Notably, the company's PWSC exit yielded a 10x return, and current portfolio companies are demonstrating strong performance. Recent catalysts include the addition of respected investors David Patinkin and Josh Horowitz to the board, strategic leadership changes in the warranty segment, and the acquisition of Bud's Plumbing, led by Rob Casper, a seasoned aggregator CEO. These moves suggest a path toward becoming a self-funded, pure-play search fund company, potentially unlocking greater valuation multiples. With substantial NOLs expiring by 2029, the urgency to monetize or streamline operations further supports the bullish outlook. Recent share price appreciation reflects growing investor recognition of Kingsway's evolving business model and strategic potential. For a comprehensive analysis of another standout stock covered by the same author, we recommend reading our summary of this on Copart, Inc. (CPRT). Kingsway Financial Services Inc. (KFS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held KFS at the end of the first quarter which was 5 in the previous quarter. While we acknowledge the potential of KFS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
09-05-2025
- Business
- Yahoo
Kingsway Financial Services Inc (KFS) Q1 2025 Earnings Call Highlights: Strategic Acquisitions ...
Release Date: May 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kingsway Financial Services Inc (NYSE:KFS) completed the acquisition of MLC Plumbing, enhancing their Kingsway Skilled Trades platform. The acquisition of Viewpoint by SPI Software strengthens their leadership in the vacation ownership software market. Revenue and adjusted EBITA for the KSX segment grew by 23% year over year. The extended warranty segment is showing signs of recovery with cash sales up 3.7% year over year. Kingsway Financial Services Inc (NYSE:KFS) appointed two new independent directors, strengthening their corporate governance. Consolidated adjusted EBITDA declined by $800,000 compared to the prior year quarter. The extended warranty segment's adjusted EBITA decreased from $1.4 million to $800,000 year over year. Higher operating expenses impacted profitability in the extended warranty segment. Raviix and C-suite experienced a small year-over-year decline in revenue. Debt increased slightly due to the addition of Bud's Plumbing seller note and refinancing of Ravik's debt. Warning! GuruFocus has detected 5 Warning Sign with KFS. Q: The Viewpoint acquisition seems interesting. Could you please provide any color on how the transaction came about and why it might make sense strategically? A: The acquisition was sourced by Drew at SPI, who developed a relationship with the company and its former owners. Strategically, it makes sense because SPI is a hosted on-prem software solution for enterprise customers in North America, while Viewpoint is a cloud-native software for smaller customers in the Asia Pacific and Australia. This acquisition provides SPI with a cloud-native solution for North America and access to a new geography for its enterprise solution. Q: Can you please explain what you mean by the J curve with search acquisitions and how it works in practice? A: The J curve refers to the performance curve over time in search fund acquisitions. Initially, there's a negative impact on profitability due to investments in talent, processes, and technology. Over time, as these investments pay off, performance improves significantly. This curve also applies to operators, where high-attribute, inexperienced operators may initially lag but eventually outperform experienced ones. Q: You mentioned a robust deal pipeline. Can you share more about what you're seeing with respect to search M&A? A: We have three Operators in Residence (OIRs) who are adept at building M&A pipelines. Additionally, platforms like Skilled Trades are specifically formed for transactions with experienced operators. We are excited about the opportunities for tuck-in acquisitions in fragmented markets. Q: Can you speak to the reasoning for the owner of Bud's staying on as President for a one-year transition period? Could we see that replicated with future acquisitions? A: It's typical and desirable in search acquisitions for the previous owner to stay on during a transition period. This helps in transferring customer relationships and institutional knowledge, making it a win-win situation. We hope to replicate this in future acquisitions. Q: With vertical market solutions and now skilled trades, you have a couple of platforms. Are there any other industries you might target for platforms? A: We evaluate industries based on growth potential and recurring revenue. Industries like insurance brokerage, wealth management, and accounting services could be compelling for building platforms. The key is finding industries that support growth via acquisition and align with our operators' interests. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Washington Post
08-05-2025
- Business
- Washington Post
Kingsway Financial: Q1 Earnings Snapshot
CHICAGO — CHICAGO — Kingsway Financial Services Inc. (KFS) on Thursday reported a loss of $3.2 million in its first quarter. The Chicago-based company said it had a loss of 13 cents per share. The merchant bank posted revenue of $28.3 million in the period. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on KFS at
