Trade-Ideas: Amsurg (AMSG) 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 Amsurg ( AMSG) 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 Amsurg as such a stock due to the following factors:

  • AMSG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.5 million.
  • AMSG has traded 73,137 shares today.
  • AMSG traded in a range 264.7% of the normal price range with a price range of $3.16.
  • AMSG traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 AMSG:

AmSurg Corp., through its subsidiaries, acquires, develops, and operates ambulatory surgery centers (ASC) in partnership with physicians in the United States. AMSG has a PE ratio of 20.5. Currently there are 5 analysts that rate Amsurg a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Amsurg has been 565,800 shares per day over the past 30 days. Amsurg has a market cap of $1.6 billion and is part of the health care sector and health services industry. The stock has a beta of 1.15 and a short float of 3.7% with 3.01 days to cover. Shares are up 3.1% year-to-date as of the close of trading on Friday.

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 Amsurg as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 2.1% when compared to the same quarter one year prior, going from $18.56 million to $18.96 million.
  • AMSG's revenue growth trails the industry average of 21.2%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, AMSG has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Net operating cash flow has slightly increased to $83.76 million or 6.45% when compared to the same quarter last year. In addition, AMSURG CORP has also modestly surpassed the industry average cash flow growth rate of 1.11%.

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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