Greenhaven Road Capital’s Updates on Kingsway Financial (KFS)

Greenhaven Road Capital, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned approximately -9%, bringing the YTD returns to approximately -9%. The factors that affected the portfolio during the quarter included a lack of direct investment in AI, no overlap with the S&P 500 and Russell 2000, and insufficient ownership of small, high growth, yet unprofitable companies that have driven the recent rally and benefited from the current AI landscape. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Greenhaven Road Capital 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 -19.28%, and its shares gained 45.31% of their value over the last 52 weeks. On November 7, 2025, Kingsway Financial Services Inc. (NYSE:KFS) stock closed at $13.02 per share, with a market capitalization of $375.932 million.

Greenhaven Road Capital stated the following regarding Kingsway Financial Services Inc. (NYSE:KFS) in its third quarter 2025 investor letter:

“Kingsway Financial Services Inc. (NYSE:KFS): I wrote about Kingsway extensively in our Q1 letter (link). Search funds have historically generated annual returns in excess of 30% but they have been hard to access with any scale and they are inherently illiquid.

At the foundation of our investment thesis is that Kingsway can attract and support very bright younger managers to acquire asset light businesses from retiring baby boomers. This month (October), Kingsway announced the hiring of another searcher, Colton Hanson. Naval Academy (Mechanical Engineering), nuclear submarine officer, Pentagon, Harvard Business School, and McKinsey. At least on paper, I would back him all day long as he searches for a Testing, Inspection, and Certification (TIC) business that he is trying to buy and grow. Kingsway’s success or failure does not rest on Colton, but he is indicative of the quality of people they are attracting and, in the end, even in the age of AI, business still depends on people.

Kingsway is an “N of 1” company providing access to search at scale, without fees, with liquidity, and with NOLs to help improve the tax efficiency. Time will tell if JT Fitzgerald and his team can continue to execute.”

Kingsway Financial Services Inc. (NYSE:KFS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 5 hedge fund portfolios held Kingsway Financial Services Inc. (NYSE:KFS) at the end of the second quarter, up from 4 in the previous quarter.  In the third quarter, Kingsway Financial Services Inc. (NYSE:KFS) reported consolidated revenue was $37.2 million, an increase of 37% compared to $27.1 million in the prior year. While we acknowledge the risk and potential of Kingsway Financial Services Inc. (NYSE:KFS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Kingsway Financial Services Inc. (NYSE:KFS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

Greenhaven Road Capital initiated a position in Kingsway Financial Services Inc. (NYSE:KFS) in Q1 2025. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.