Willis Group Holdings (WSH) Flagged As A Storm The Castle Stock - TheStreet

Trade-Ideas LLC identified

Willis Group Holdings

(

WSH

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Willis Group Holdings as such a stock due to the following factors:

  • WSH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.8 million.
  • WSH has traded 245,001 shares today.
  • WSH is trading at 2.86 times the normal volume for the stock at this time of day.
  • WSH crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 WSH:

Willis Group Holdings Public Limited Company provides insurance brokerage, reinsurance, and risk management consulting services worldwide. The stock currently has a dividend yield of 2.7%. WSH has a PE ratio of 17. Currently there are 7 analysts that rate Willis Group Holdings a buy, 3 analysts rate it a sell, and 3 rate it a hold.

The average volume for Willis Group Holdings has been 1.1 million shares per day over the past 30 days. Willis Group has a market cap of $8.2 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.93 and a short float of 4.5% with 5.70 days to cover. Shares are down 61.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Willis Group Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 15.5%. Since the same quarter one year prior, revenues slightly increased by 4.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • WILLIS GROUP HOLDINGS PLC reported significant earnings per share improvement 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, WILLIS GROUP HOLDINGS PLC reported lower earnings of $1.99 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus $1.99).
  • The debt-to-equity ratio of 1.07 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, WSH's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.
  • Net operating cash flow has decreased to $106.00 million or 17.82% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WILLIS GROUP HOLDINGS PLC has marginally lower results.

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