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Trade-Ideas: Verisk Analytics (VRSK) Is Today's "Water-Logged And Getting Wetter" Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Verisk Analytics (VRSK) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Verisk Analytics as such a stock due to the following factors:

  • VRSK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.6 million.
  • VRSK has traded 751,089 shares today.
  • VRSK traded in a range 223.2% of the normal price range with a price range of $2.19.
  • VRSK traded below its daily resistance level (quality: 127 days, meaning that the stock is crossing a resistance level set by the last 127 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in VRSK with the Ticky from Trade-Ideas. See the FREE profile for VRSK NOW at Trade-Ideas

More details on VRSK:

Verisk Analytics, Inc. provides proprietary data, analytics methods, and embedded decision support solutions for detecting fraud in property and casualty (P&C) insurance, financial, and healthcare industries primarily in the United States. VRSK has a PE ratio of 33.8. Currently there are 8 analysts that rate Verisk Analytics a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Verisk Analytics has been 588,200 shares per day over the past 30 days. Verisk Analytics has a market cap of $11.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.33 and a short float of 0.6% with 1.59 days to cover. Shares are up 33.4% year to date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Verisk Analytics as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.03% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VRSK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • VERISK ANALYTICS INC has improved earnings per share by 13.9% 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. We feel that this trend should continue. During the past fiscal year, VERISK ANALYTICS INC increased its bottom line by earning $1.92 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $1.92).
  • VRSK's revenue growth trails the industry average of 23.0%. Since the same quarter one year prior, revenues rose by 12.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 2645.17% to $55.43 million when compared to the same quarter last year. In addition, VERISK ANALYTICS INC has also vastly surpassed the industry average cash flow growth rate of 32.14%.
  • The gross profit margin for VERISK ANALYTICS INC is rather high; currently it is at 58.54%. Regardless of VRSK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VRSK's net profit margin of 19.98% significantly outperformed against the industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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