Based in London, Willis Group operates an insurance brokerage and consulting service.
Willis Group will replace watchmaker Fossil (FOSL) in the S&P 500 after the market close on January 4. The index represents 500 large companies and is a gauge of large-cap U.S. equities.
The company is merging with the professional services company Towers Watson & Co. (TW) in a deal that should close before January 4, the S&P Dow Jones Indices said in a statement on Monday.
After the merger, Willis Group will change its name to Willis Towers Watson and will trade under the ticker "WLTW," the S&P said.
Towers Watson stock is up by 3.95% to $139.86 in mid-morning trading on Tuesday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate WILLIS GROUP HOLDINGS PLC as a Buy with a ratings score of B. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 15.8%. 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.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Insurance industry and the overall market, WILLIS GROUP HOLDINGS PLC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 1771.4% when compared to the same quarter one year prior, rising from -$7.00 million to $117.00 million.
- After a year of stock price fluctuations, the net result is that WSH's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 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 ($2.52 versus $1.99).
- You can view the full analysis from the report here: WSH