Trade-Ideas LLC identified

WR Berkley

(

WRB

) 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 WR Berkley as such a stock due to the following factors:

  • WRB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.9 million.
  • WRB has traded 122,388 shares today.
  • WRB traded in a range 204% of the normal price range with a price range of $1.57.
  • WRB traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 WRB:

W. R. Berkley Corporation, an insurance holding company, operates as commercial lines writers in the United States. It operates through three segments: Insurance-Domestic, Insurance-International, and Reinsurance-Global. The stock currently has a dividend yield of 0.9%. WRB has a PE ratio of 14. Currently there are no analysts that rate WR Berkley a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for WR Berkley has been 539,100 shares per day over the past 30 days. WR Berkley has a market cap of $6.6 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.81 and a short float of 4.1% with 9.91 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates WR Berkley as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, 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 shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 19.5%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • Net operating cash flow has significantly increased by 63.04% to $260.97 million when compared to the same quarter last year. In addition, BERKLEY (W R) CORP has also vastly surpassed the industry average cash flow growth rate of -34.94%.
  • Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Insurance industry average. The net income has decreased by 0.9% when compared to the same quarter one year ago, dropping from $110.71 million to $109.75 million.

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