Trade-Ideas LLC identified

Arthur J Gallagher

(

AJG

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Arthur J Gallagher as such a stock due to the following factors:

  • AJG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.6 million.
  • AJG has traded 188,551 shares today.
  • AJG is trading at 2.77 times the normal volume for the stock at this time of day.
  • AJG is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AJG:

Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage and risk management services in the United States and internationally. It operates through three segments: Brokerage, Risk Management, and Corporate. The stock currently has a dividend yield of 4%. AJG has a PE ratio of 19. Currently there are 8 analysts that rate Arthur J Gallagher a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Arthur J Gallagher has been 1.3 million shares per day over the past 30 days. Arthur J Gallagher has a market cap of $6.7 billion and is part of the financial sector and insurance industry. The stock has a beta of 1.12 and a short float of 1.6% with 1.79 days to cover. Shares are down 8.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Arthur J Gallagher as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 15.4%. Since the same quarter one year prior, revenues rose by 12.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 42.4% when compared to the same quarter one year prior, rising from $93.60 million to $133.30 million.
  • Net operating cash flow has significantly increased by 827.27% to $244.80 million when compared to the same quarter last year. In addition, ARTHUR J GALLAGHER & CO has also vastly surpassed the industry average cash flow growth rate of -22.81%.
  • ARTHUR J GALLAGHER & CO has improved earnings per share by 29.3% in the most recent quarter compared to 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, ARTHUR J GALLAGHER & CO reported lower earnings of $1.95 versus $2.07 in the prior year. This year, the market expects an improvement in earnings ($2.55 versus $1.95).
  • AJG's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.03 is sturdy.

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