Trade-Ideas: RenaissanceRe Holdings (RNR) Is Today's

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified RenaissanceRe Holdings ( RNR) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified RenaissanceRe Holdings as such a stock due to the following factors:

  • RNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.4 million.
  • RNR has traded 122,964 shares today.
  • RNR traded in a range 275.1% of the normal price range with a price range of $3.15.
  • RNR traded below its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on RNR:

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance coverages and related services in the United States and internationally. The stock currently has a dividend yield of 1.3%. RNR has a PE ratio of 9.1. Currently there are 6 analysts that rate RenaissanceRe Holdings a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for RenaissanceRe Holdings has been 460,800 shares per day over the past 30 days. RenaissanceRe has a market cap of $3.8 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.40 and a short float of 2.3% with 1.72 days to cover. Shares are up 5.4% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates RenaissanceRe Holdings as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Compared to where it was trading one year ago, RNR is up 12.39% to its most recent closing price of 84.94. Looking ahead, although the push and pull of a bull or bear market could certainly alter the outcome, our view is that this stock's positive fundamentals give it good potential for further appreciation.
  • RNR's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 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.
  • The net income has significantly decreased by 77.3% when compared to the same quarter one year ago, falling from $151.02 million to $34.29 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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