July 16, 2017

NASDAQ: KINS

KINGSTONE COS INC

BUY HOLD SELL

BUY
RATING SINCE 10/28/2013
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $21.07

Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.25 1.55% 0.67 $170.5 Million $8.45-$16.50 $16.05

Sector: Financial Services Sub-Industry: Property & Casualty Insurance Source: S&P
Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
KINS BUSINESS DESCRIPTION
Kingstone Companies, Inc., through its subsidiary, 23
Kingstone Insurance Company, underwrites TARGET
TARGET PRICE
TARGETPRICE $21.07
PRICE$21.07
$21.07
TARGET PRICE $21.07
property and casualty insurance products to small 20
businesses and individuals in New York.
18
STOCK PERFORMANCE (%)
3 Mo. 1 Yr. 3 Yr (Ann) 15
Price Change 5.59 84.69 32.50
13
GROWTH (%)
Last Qtr 12 Mo. 3 Yr CAGR 10
Revenues 11.93 17.10 26.71
Net Income 171.90 38.08 66.02 8
EPS 114.28 23.95 33.51 Rating History
BUY
RETURN ON EQUITY (%)
Volume in Millions
KINS Ind Avg S&P 500 2
Q1 2017 11.15 8.69 13.16
Q1 2016 15.40 8.95 11.83 1
Q1 2015 13.15 9.63 13.71
0
2015 2016 2017
P/E COMPARISON COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History

RECOMMENDATION
We rate KINGSTONE COS INC (KINS) a BUY. This is based on the convergence of positive investment
measures, which should help this stock outperform the majority of stocks that we rate. The company's
strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with
reasonable debt levels by most measures, solid stock price performance, compelling growth in net income
and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the
company has had somewhat disappointing return on equity.
13.49 29.76 24.41
KINS Ind Avg S&P 500 HIGHLIGHTS
KINS's revenue growth has slightly outpaced the industry average of 8.2%. Since the same quarter one year
prior, revenues rose by 11.9%. This growth in revenue appears to have trickled down to the company's bottom
EPS ANALYSIS¹ ($) line, improving the earnings per share.

KINS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a
relatively favorable sign.

Powered by its strong earnings growth of 114.28% and other important driving factors, this stock has surged
Q1 0.07

by 84.69% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding
Q1 0.05

the stock's future course, although almost any stock can fall in a broad market decline, KINS should continue
Q2 0.32
Q3 0.32
Q4 0.25

Q2 0.36
Q3 0.43
Q4 0.25

Q1 0.15

to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

2015 2016 2017 The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500
NA = not available NM = not meaningful
and the Insurance industry. The net income increased by 171.9% when compared to the same quarter one
year prior, rising from $0.54 million to $1.47 million.
1 Compustat fiscal year convention is used for all fundamental
data items.
KINGSTONE COS INC reported significant earnings per share improvement in the most recent quarter
compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per
share growth over the past two years. However, we anticipate underperformance relative to this pattern in
the coming year. During the past fiscal year, KINGSTONE COS INC increased its bottom line by earning $1.11
versus $0.94 in the prior year. For the next year, the market is expecting a contraction of 9.9% in earnings
($1.00 versus $1.11).

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 1
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: KINS

KINGSTONE COS INC

Sector: Financial Services Property & Casualty Insurance Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.25 1.55% 0.67 $170.5 Million $8.45-$16.50 $16.05

PEER GROUP ANALYSIS INDUSTRY ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
The US insurance industry provides a broad range of financial security products for individuals and
FNHC businesses. The industry includes primary insurers, reinsurers and agency and brokerage firms. Insurance
30%

CNFR companies can be categorized into life and health, property and casualty and reinsurance. Premiums and
FA

investment income are the primary component of overall revenue. The industry is mature and dominated by
VO

large companies with intense price competition. The US insurance industry has witnessed a great deal of
RA

ITIC
BL

KFS merger and acquisition activity in recent years.

E

The life insurance industry remains highly competitive due to rapid product development and shortened
KINS
product life-cycles. In recent years, the L&H segment has been characterized by a dramatic product shift
from traditional life insurance to annuity and retirement asset management. Life insurance in the US
Revenue Growth (TTM)

expanded to more than $578 billion, or nearly half of total business line. This can be attributed to an increased
AFH focus on retirement and estate planning, which has led to robust sales of combined savings protection
products and annuities. The trend toward the single premium business and pension and annuities products
UN

FAC
FA

drove sales. Sweeping national health insurance reform was signed into law in 2010 that allows young people
VO

UNAM HRTG to stay on their parent’s health plan, begins to close the Medicare drug plan donut hole, and phases in
RA

HALL
B
0%

mandatory coverage of all Americans.

LE

-40% 20%
EBITDA Margin (TTM) Significant challenges have arisen for property and casualty insurance companies. However, the absence of
Companies with higher EBITDA margins and any recent major casualty or natural calamity has benefited the industry.
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth The US reinsurance market has entered a soft phase of the cycle and will remain as such assuming no major
rates. Companies for this scatter plot have a market catastrophes in the coming quarters. The primary and reinsurance sectors experienced divergent pricing
capitalization between $46.9 Million and $365.6 trends, but the reinsurance market remains relatively stable.
Million. Companies with NA or NM values do not
appear. The insurance industry is not immune to the financial troubles that plague the rest of the US economy.
Despite having minor exposure to higher risk mortgage-related assets, the slowdown in the US economy may
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization. adversely impact insurers’ performance in the near future. Insurers face challenges related to catastrophe
losses, increasing price pressure and changes in the legal and regulatory environment, all of which could
REVENUE GROWTH AND EARNINGS YIELD erode future underwriting performance and profitability. On a positive note, US insurers may embrace
international market opportunities in response to increased market saturation at the domestic level.
FNHC
30%

CNFR
FA

PEER GROUP: Insurance

VO
RA

ITIC Recent Market Price/ Net Sales Net Income

BL

KFS Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
E

KINS KINGSTONE COS INC 16.05 170 13.49 79.64 9.83

KINS CNFR CONIFER HOLDINGS INC 7.10 54 NM 98.06 -8.21
UNAM UNICO AMERICAN CORP 9.15 49 NM 35.70 -3.35
Revenue Growth (TTM)

FAC FIRST ACCEPTANCE CORP 1.14 47 NM 380.74 -23.05

AFH BWINB BALDWIN & LYONS 24.35 366 16.91 313.28 21.59
UN

FAC BWINB ITIC INVESTORS TITLE CO 188.90 356 16.19 151.43 22.19
FA

HRTG
VO

UNAM HRTG HERITAGE INSURANCE HOLDINGS 12.06 354 10.86 426.69 32.43
RA
B

FNHC FEDERATED NATIONAL HLDG CO 15.41 213 NM 340.35 -6.59

0%

LE

-50%
HALL10%
HALL HALLMARK FINANCIAL SERVICES 11.23 207 34.03 382.87 6.44
Earnings Yield (TTM) AFH ATLAS FINANCIAL HOLDINGS INC 13.95 166 87.19 182.13 2.69
Companies that exhibit both a high earnings yield KFS KINGSWAY FINANCIAL SVCS INC 6.15 145 NM 184.83 0.67
and high revenue growth are generally more The peer group comparison is based on Major Property & Casualty Insurance companies of comparable size.
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between 3.4% and
29.2%. Companies with NA or NM values do not
appear.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 2
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: KINS

KINGSTONE COS INC

Sector: Financial Services Property & Casualty Insurance Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.25 1.55% 0.67 $170.5 Million $8.45-$16.50 $16.05

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

Kingstone Companies, Inc., through its subsidiary, Below is a summary of the major fundamental and technical factors we consider when determining our
Kingstone Insurance Company, underwrites property and overall recommendation of KINS shares. It is provided in order to give you a deeper understanding of our
casualty insurance products to small businesses and rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
individuals in New York. The company provides personal important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
lines insurance products, such as homeowners, dwelling understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
fire, 3-4 family dwelling package, cooperative and valuation. Please refer to our Valuation section on page 5 for further information.
condominium, renters, equipment breakdown, service
line endorsements, and personal umbrella policies; and FACTOR SCORE
commercial liability policies comprising small business
retail, service, and office risks without residential Growth out of 5 stars 4.5
exposure to business owners. It also offers for-hire Measures the growth of both the company's income statement and weak strong
vehicle physical damage only policies for livery and car cash flow. On this factor, KINS has a growth score better than 80% of
service vehicles and taxicabs; and canine legal liability the stocks we rate.
policies, as well as reinsurance products. In addition, the
company, through its subsidiary, Payments, Inc., places
contracts with a third party licensed premium finance
Total Return out of 5 stars 5.0
company. Kingstone Companies, Inc. sells its products Measures the historical price movement of the stock. The stock weak strong
through independent retail and wholesale agents and performance of this company has beaten 90% of the companies we
brokers. The company was formerly known as DCAP cover.
Group, Inc. and changed its name to Kingstone
Companies, Inc. in July 2009. Kingstone Companies, Inc. Efficiency out of 5 stars 4.5
was founded in 1886 and is based in Kingston, New Measures the strength and historic growth of a company's return on weak strong
York. invested capital. The company has generated more income per dollar of
capital than 80% of the companies we review.
KINGSTONE COS INC
15 Joys Lane
Kingston, NY 12401
Price volatility out of 5 stars 4.5
USA Measures the volatility of the company's stock price historically. The weak strong
Phone: 845-802-7900 stock is less volatile than 80% of the stocks we monitor.
Fax: 516-295-7216
http://www.kingstonecompanies.com Solvency out of 5 stars 5.0
Measures the solvency of the company based on several ratios. The weak strong
company is more solvent than 90% of the companies we analyze.

Income out of 5 stars 3.5

Measures dividend yield and payouts to shareholders. The company's weak strong
dividend is higher than 60% of the companies we track.

THESTREET RATINGS RESEARCH METHODOLOGY

TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.

Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 3
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: KINS

KINGSTONE COS INC

Sector: Financial Services Property & Casualty Insurance Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.25 1.55% 0.67 $170.5 Million $8.45-$16.50 $16.05

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial KINGSTONE COS INC's gross profit margin for the first quarter of its fiscal year 2017 has significantly
increased when compared to the same period a year ago. The company managed to grow both sales and net
income at a faster pace than the average competitor in its industry this quarter as compared to the same
quarter a year ago.

At the same time, stockholders' equity ("net worth") has greatly increased by 90.58% from the same quarter
last year.

0.30 1.00 E 1.40 E STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
Q2 FY17 2017(E) 2018(E) next 12-months. To learn more visit www.TheStreetRatings.com.

INCOME STATEMENT
Q1 FY17 Q1 FY16
Net Sales ($mil) 20.65 18.45
EBITDA ($mil) 2.50 1.02
EBIT ($mil) 2.18 0.73
Net Income ($mil) 1.47 0.54

BALANCE SHEET
Q1 FY17 Q1 FY16
Cash & Equiv. ($mil) 24.34 7.57
Total Assets ($mil) 202.69 157.63
Total Debt ($mil) 0.00 0.00
Equity ($mil) 88.10 46.22

PROFITABILITY
Q1 FY17 Q1 FY16
Gross Profit Margin 12.09% 5.50%
EBITDA Margin 12.09% 5.50%
Operating Margin 10.55% 3.96%
Sales Turnover 0.39 0.43
Return on Assets 4.84% 4.51%
Return on Equity 11.15% 15.40%

DEBT
Q1 FY17 Q1 FY16
Current Ratio NA NA
Debt/Capital 0.00 0.00
Interest Expense 0.00 0.00
Interest Coverage NA NA

SHARE DATA
Q1 FY17 Q1 FY16
Shares outstanding (mil) 11 7
Div / share 0.06 0.06
EPS 0.15 0.07
Book value / share 8.29 6.32
Institutional Own % NA NA
Avg Daily Volume 64,636 100,603
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 4
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: KINS

KINGSTONE COS INC

Sector: Financial Services Property & Casualty Insurance Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
$0.25 1.55% 0.67 $170.5 Million $8.45-$16.50 $16.05

RATINGS HISTORY VALUATION

Our rating for KINGSTONE COS INC has not
changed since 10/28/2013. As of 7/13/2017, the
stock was trading at a price of $16.05 which is 2.7%
below its 52-week high of $16.50 and 89.9% above
its 52-week low of $8.45.
BUY. KINGSTONE COS INC's P/E ratio indicates a significant discount compared to an average of 29.76 for
the Insurance industry and a significant discount compared to the S&P 500 average of 24.41. Conducting a
second comparison, its price-to-book ratio of 1.94 indicates a discount versus the S&P 500 average of 3.04
and a premium versus the industry average of 1.89. The price-to-sales ratio is similar to the S&P 500 average,
but it is significantly above the industry average, indicating a premium.

2 Year Chart
$18 Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5
BUY: $7.67

premium discount premium discount

$15 KINS 13.49 Peers 29.76 KINS 9.19 Peers 11.50
• Discount. A lower P/E ratio than its peers can • Discount. The P/CF ratio, a stock’s price divided by
$13 signify a less expensive stock or lower growth the company's cash flow from operations, is useful
expectations. for comparing companies with different capital
$10 • KINS is trading at a significant discount to its peers. requirements or financing structures.
• KINS is trading at a discount to its peers.
2015 2016
Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5
premium discount premium discount
KINS 11.46 Peers 16.10 KINS NM Peers 2.42
MOST RECENT RATINGS CHANGES
• Average. An average price-to-projected earnings • Neutral. The PEG ratio is the stock’s P/E divided by
Date Price Action From To ratio can signify an industry neutral stock price and the consensus estimate of long-term earnings
7/13/15 $7.67 No Change Buy Buy average future growth expectations. growth. Faster growth can justify higher price
Price reflects the closing price as of the date listed, if available • KINS is trading at a valuation on par with its peers. multiples.
• KINS's negative PEG ratio makes this valuation
measure meaningless.
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5
(as of 7/13/2017) premium discount lower higher
KINS 1.94 Peers 1.89 KINS 23.95 Peers 19.74
43.81% Buy - We believe that this stock has the • Average. A lower price-to-book ratio makes a stock • Higher. Elevated earnings growth rates can lead to
opportunity to appreciate and produce a total return of more attractive to investors seeking stocks with capital appreciation and justify higher
more than 10% over the next 12 months. lower market values per dollar of equity on the price-to-earnings ratios.
balance sheet. • KINS is expected to have an earnings growth rate
30.69% Hold - We do not believe this stock offers • KINS is trading at a valuation on par with its peers. that exceeds its peers.
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5
return is roughly in balance with the risk of loss. premium discount lower higher
KINS 2.14 Peers 1.49 KINS 17.10 Peers 12.52
25.50% Sell - We believe that this stock is likely to • Premium. In the absence of P/E and P/B multiples, • Higher. A sales growth rate that exceeds the
decline by more than 10% over the next 12 months, with the price-to-sales ratio can display the value industry implies that a company is gaining market
the risk involved too great to compensate for any investors are placing on each dollar of sales. share.
possible returns. • KINS is trading at a significant premium to its • KINS has a sales growth rate that significantly
industry. exceeds its peers.
TheStreet Ratings DISCLAIMER:
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TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
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This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 5
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.