KMPR heads into the last week of May with a stark contradiction at its centre: the stock is down 15% over the past month and suffered a 7% single-day drop on May 26, yet short sellers have been actively reducing positions — not adding to them.
The earnings release on May 6 set the tone. The stock fell 10.6% on the day and shed another 9.4% over the following five sessions. Revenue fell 7% year-over-year in the most recent quarter, the company posted a net loss, and bodily injury severity in California continued to run well above expectations. That is the backdrop against which the current $27.69 price needs to be understood.
Short sellers have been retreating in the aftermath. Short interest as a percentage of free float peaked near 6.4% in late April, climbed briefly to 6.2% around May 18, then fell sharply — dropping 23% week-on-week to 4.7% of the float. The lending market tells a similar story of loosening pressure. Borrow availability is extremely ample at nearly 5,936% — far above even the 52-week low of 742% — meaning the pool of shares available to lend vastly exceeds what has been borrowed. Cost to borrow ticked up 14% on the week to 0.43%, but that remains a negligible rate. None of this points to a squeeze dynamic; shorts are walking away on their own terms after a sharp decline rewards their thesis.
Options positioning adds a layer of nuance but not a strong directional signal. The put/call ratio is running at 3.42 — well above 1.0, indicating persistent put-heavy positioning — but the reading is essentially in line with its 20-day average of 3.38, with a z-score near zero. The elevated absolute PCR appears to be a structural feature of KMPR's option market rather than a fresh surge in bearish hedging. The 52-week PCR range of 0.009 to 10.07 is extraordinarily wide, confirming the options market here can swing dramatically; at current levels, caution is present but not at a meaningful extreme.
The Street's directional drift has been consistently downward. UBS maintained its Buy but cut its target from $48 to $44 on May 11 — a notable concession from an analyst still nominally bullish. Piper Sandler, which holds an Underweight, trimmed its target from $35 to $28 in the days after earnings, putting it now only marginally above the current price. The consensus mean target of $51 sits nearly double the current price, but that gap is increasingly hard to take at face value given the sequential target cuts across the board. Price-to-book is 0.68 and the EV/EBIT sits well into three-digit territory, reflecting an operation that is still near breakeven on a reported basis. Net debt of $1.4 billion against an EBITDA of just $20 million in the latest quarter is the underlying constraint that limits re-rating potential. The ORTEX short score has settled around 37, having briefly spiked to 44.8 on May 18 before pulling back — a temporary flare-up that has since faded.
Institutional flows carry one noteworthy signal. BlackRock lifted its position by over 2 million shares to hold 12.5% of the company as of the end of April. That is a sizeable move from the largest holder, though its timing predates the post-earnings decline. The rest of the top holders — Vanguard entities, Dimensional, State Street — show modest incremental adds, consistent with passive rebalancing rather than active conviction buying. Insider activity since May has been limited to a single small sell by an EVP; the cluster of February 6 sells, all at prices around $34, underscores the gap between where insiders were trimming and where the stock trades today.
Next earnings are scheduled for August 5. Between now and then, the question is whether management can demonstrate improving California auto loss trends — the single variable the bear case most explicitly flags as the linchpin for any recovery narrative.
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