Trade-Ideas: Everest Re Group (RE) Is Today's "Barbarian At The Gate" Stock - TheStreet

Trade-Ideas LLC identified

Everest Re Group

(

RE

) 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 Everest Re Group as such a stock due to the following factors:

  • RE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.4 million.
  • RE has traded 116,726 shares today.
  • RE traded in a range 232% of the normal price range with a price range of $5.99.
  • RE traded above its daily resistance level (quality: 67 days, meaning that the stock is crossing a resistance level set by the last 67 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 RE:

Everest Re Group, Ltd., through its subsidiaries, provides reinsurance and insurance products. The company operates through U.S. Reinsurance, International, Bermuda, Insurance, and Mt. Logan Re segments. The U.S. The stock currently has a dividend yield of 2.1%. RE has a PE ratio of 7. Currently there are 2 analysts that rate Everest Re Group a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Everest Re Group has been 305,300 shares per day over the past 30 days. Everest Re Group has a market cap of $7.9 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.73 and a short float of 5% with 6.02 days to cover. Shares are up 5.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Everest Re Group as a

buy

. 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, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • RE's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has slightly increased to $227.94 million or 2.06% when compared to the same quarter last year. In addition, EVEREST RE GROUP LTD 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.
  • Despite the weak revenue results, RE has outperformed against the industry average of 13.3%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market, EVEREST RE GROUP LTD's return on equity exceeds that of both the industry average and the S&P 500.

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