Assurant's (AIZ) Stock Chart Indicates 35% Long-Term Rise

For Assurant (AIZ) shares consider buying a pullback to $82.50 if available.
By Bruce Kamich ,

NEW YORK (TheStreet) -- Assurant (AIZ) - Get Report has been powering higher since late April. It passed its 2007 price highs in July and August while much of the stock market was weak -- an impressive feat. AIZ remains strong. Traders looking to go long or add to an existing long should consider buying a pullback to $82.50 if available.

AIZ broke out above the 50-day and 200-day moving averages in May, and dips to the rising 50-day have been buying opportunities. The On-Balance-Volume (OBV) line has confirmed the rally since early May and shows no bearish divergences.

In the long-term view of AIZ, above, one can see the last consolidation in the $60 to $70 area before the most recent mark up. An obvious round number and price target for AIZ is $100 and $115 is a longer-term objective using a point and figure chart (not shown).

TheStreet Ratings team rates ASSURANT INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate ASSURANT INC (AIZ) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Although AIZ's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average.
  • Net operating cash flow has increased to $360.58 million or 42.57% when compared to the same quarter last year. In addition, ASSURANT INC has also vastly surpassed the industry average cash flow growth rate of -61.22%.
  • ASSURANT INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ASSURANT INC increased its bottom line by earning $6.42 versus $6.30 in the prior year. This year, the market expects an improvement in earnings ($7.10 versus $6.42).
  • Despite the weak revenue results, AIZ has outperformed against the industry average of 17.7%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: AIZ

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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