Affiliated Managers Group (AMG) Marked As A Barbarian At The Gate

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 "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 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 $90.3 million.
  • AMG has traded 231,941 shares today.
  • AMG traded in a range 208.1% of the normal price range with a price range of $9.24.
  • AMG traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 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 28.7. 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 483,100 shares per day over the past 30 days. Affiliated Managers Group has a market cap of $9.8 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.53 and a short float of 1.7% with 2.08 days to cover. Shares are down 16.1% year-to-date as of the close of trading on Thursday.

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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, notable return on equity, expanding profit margins, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 16.8%. Since the same quarter one year prior, revenues rose by 21.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Capital Markets industry and the overall market, AFFILIATED MANAGERS GRP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for AFFILIATED MANAGERS GRP INC is rather high; currently it is at 53.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.63% is above that of the industry average.
  • AFFILIATED MANAGERS GRP INC reported significant earnings per share improvement 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 $6.49 versus $3.27 in the prior year. This year, the market expects an improvement in earnings ($11.20 versus $6.49).
  • 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 110.7% when compared to the same quarter one year prior, rising from $75.10 million to $158.20 million.

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