Trade-Ideas: Aflac (AFL) Is Today's "Barbarian At The Gate" Stock - TheStreet

Trade-Ideas LLC identified

Aflac

(

AFL

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Aflac as such a stock due to the following factors:

  • AFL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $169.7 million.
  • AFL has traded 206,819 shares today.
  • AFL traded in a range 284.5% of the normal price range with a price range of $2.42.
  • AFL traded above its daily resistance level (quality: 74 days, meaning that the stock is crossing a resistance level set by the last 74 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on AFL:

Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The stock currently has a dividend yield of 2.5%. AFL has a PE ratio of 11. Currently there are 4 analysts that rate Aflac a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Aflac has been 2.2 million shares per day over the past 30 days. Aflac has a market cap of $27.4 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.99 and a short float of 1.7% with 2.78 days to cover. Shares are up 3.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Aflac as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to $1,643.00 million or 8.30% when compared to the same quarter last year. In addition, AFLAC INC has also vastly surpassed the industry average cash flow growth rate of -57.02%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.3%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.

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