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 Affiliated Managers Group ( AMG) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Affiliated Managers Group as such a stock due to the following factors:
- AMG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.8 million.
- AMG has traded 125,024 shares today.
- AMG is trading at 8.34 times the normal volume for the stock at this time of day.
- AMG crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in AMG with the Ticky from Trade-Ideas. See the FREE profile for AMG NOW at Trade-Ideas More details on AMG: Affiliated Managers Group, Inc., through its affiliates, operates as an asset management company providing investment management services to mutual funds, institutional clients, and high net worth individuals in the United States. It provides advisory or subadvisory services to mutual funds. AMG has a PE ratio of 137.4. Currently there are 5 analysts that rate Affiliated Managers Group a buy, no analysts rate it a sell, and none rate it a hold. The average volume for Affiliated Managers Group has been 325,800 shares per day over the past 30 days. Affiliated Managers Group has a market cap of $10.6 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.60 and a short float of 2.3% with 3.14 days to cover. Shares are down 13.5% year-to-date as of the close of trading on Monday. 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 Affiliated Managers Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 15.2%. Since the same quarter one year prior, revenues rose by 18.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AFFILIATED MANAGERS GRP INC has improved earnings per share by 31.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AFFILIATED MANAGERS GRP INC increased its bottom line by earning $3.27 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($9.74 versus $3.27).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 37.0% when compared to the same quarter one year prior, rising from $54.90 million to $75.20 million.
- The gross profit margin for AFFILIATED MANAGERS GRP INC is rather high; currently it is at 56.48%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.63% trails the industry average.
- Net operating cash flow has increased to $282.80 million or 33.96% when compared to the same quarter last year. Despite an increase in cash flow of 33.96%, AFFILIATED MANAGERS GRP INC is still growing at a significantly lower rate than the industry average of 254.30%.
- You can view the full Affiliated Managers Group Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.