Insider Executives Buy Shares as Major Shareholder Exits

The recent actions of individuals within Kingsway Financial Services (KFS) have created an intriguing opportunity for investors looking to take a contrarian approach. Director and major shareholder Joseph Stilwell has been steadily selling off millions of dollars’ worth of stock throughout the early months of 2025, indicating a potential lack of confidence in the company. However, in stark contrast, top executives such as CEO John Taylor Maloney Fitzgerald and CFO Kent A. Hansen have been quietly purchasing shares at lower prices, signaling a belief in the company’s value.

Stilwell’s largest sale occurred in March when he unloaded 8 million shares at $8 each, representing a significant portion of his stake in the company. Subsequent sales, including a $2.26 million divestiture in June, suggest that he may be looking to completely exit his position. Despite the magnitude of these sales, Stilwell’s substantial net worth of over $152 million suggests that these transactions may be driven by liquidity needs or a desire to rebalance his portfolio, rather than a lack of faith in KFS.

On the other hand, Fitzgerald and Hansen have been actively acquiring shares at various price points since the beginning of the year. Their purchases, ranging from $7.31 to $14.02 per share, amount to over $138,000 in total. This pattern of insider buying contradicts the broader trend of insider selling at KFS, indicating a divergent view among company leadership regarding the stock’s current valuation.

The data surrounding insider sentiment at KFS further emphasizes this divergence. While insider selling activity at the company ranks in the top percentile over the past 90 days, executives’ purchases have consistently outperformed the S&P 500 by nearly 8% on average. This suggests that while Stilwell’s actions may reflect personal financial considerations, the leadership team sees potential value in the stock at its current price.

With over 52% of KFS owned by insiders, including the executives who have been buying shares, there appears to be a consensus that the stock is trading below its intrinsic value. While Stilwell’s sales may have temporarily impacted the stock price, the continued purchases by the CEO and CFO suggest a belief in a potential rebound. This discrepancy between insider actions presents an opportunity for contrarian investors who believe in the company’s underlying fundamentals.

Critics of a potential investment in KFS may point to factors such as low liquidity and sector-specific risks in financial services. However, the executives’ strategic timing of purchases, including avoiding losses following market dips, indicates a calculated approach to investing in the company.

For investors considering an entry into KFS, a gradual accumulation of shares at current levels, coupled with a dollar-cost averaging strategy, may be advisable. Setting a stop-loss below the stock’s recent lows and targeting prices aligned with executives’ highest purchase points could help manage risk and potential upside. Monitoring for additional insider buying signals may also provide further validation of the contrarian investment thesis.

In a market environment driven by fear and uncertainty, the divergence in insider actions at KFS presents a unique opportunity for investors to capitalize on the company’s strategic direction. By aligning with those who have an intimate understanding of the business, investors may find a path to profit amidst market hesitancy.