Trade-Ideas LLC identified

Allied World Assurance Co Holdings

(

AWH

) 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 Allied World Assurance Co Holdings as such a stock due to the following factors:

  • AWH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.3 million.
  • AWH has traded 54,053 shares today.
  • AWH traded in a range 292.4% of the normal price range with a price range of $1.34.
  • AWH traded above its daily resistance level (quality: 272 days, meaning that the stock is crossing a resistance level set by the last 272 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 AWH:

Allied World Assurance Company Holdings, AG, through its subsidiaries, provides property, casualty, and specialty insurance and reinsurance solutions worldwide. It operates in three segments: North American Insurance, Global Markets Insurance, and Reinsurance. The stock currently has a dividend yield of 2.9%. AWH has a PE ratio of 83. Currently there are 2 analysts that rate Allied World Assurance Co Holdings a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Allied World Assurance Co Holdings has been 500,200 shares per day over the past 30 days. Allied World Assurance Co has a market cap of $3.2 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.64 and a short float of 1.3% with 1.56 days to cover. Shares are down 4.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Allied World Assurance Co Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has slightly increased to $347.50 million or 9.42% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -17.71%.
  • Despite the weak revenue results, AWH has outperformed against the industry average of 14.1%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. 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 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • ALLIED WORLD ASSURANCE CO AG's earnings per share declined by 36.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ALLIED WORLD ASSURANCE CO AG reported lower earnings of $0.82 versus $4.90 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $0.82).
  • The gross profit margin for ALLIED WORLD ASSURANCE CO AG is currently lower than what is desirable, coming in at 29.27%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 11.34% is above that of the industry average.

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