Trade-Ideas: ACE (ACE) 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 ACE (ACE) 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 ACE as such a stock due to the following factors:
- ACE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $118.7 million.
- ACE has traded 1.6 million shares today.
- ACE traded in a range 243.6% of the normal price range with a price range of $2.46.
- ACE traded below its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 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 ACE with the Ticky from Trade-Ideas. See the FREE profile for ACE NOW at Trade-IdeasMore details on ACE: ACE Limited, through its subsidiaries, provides a range of insurance and reinsurance products to insured's worldwide. The stock currently has a dividend yield of 2.1%. ACE has a PE ratio of 9.6. Currently there are 12 analysts that rate ACE a buy, no analysts rate it a sell, and 4 rate it a hold.The average volume for ACE has been 1.1 million shares per day over the past 30 days. ACE has a market cap of $33.4 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.95 and a short float of 1.2% with 3.17 days to cover. Shares are up 23.2% 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 ACE as a buy. 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, increase in stock price during the past year, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.Highlights from the ratings report include:
- ACE's revenue growth has slightly outpaced the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 0.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ACE's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 25.06%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, ACE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ACE LTD has improved earnings per share by 43.0% 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 year. We feel that this trend should continue. During the past fiscal year, ACE LTD increased its bottom line by earning $7.88 versus $4.51 in the prior year. This year, the market expects an improvement in earnings ($8.93 versus $7.88).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, ACE LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full ACE Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV