Assured Guaranty (AGO) Highlighted As Storm The Castle Stock

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 Assured Guaranty ( AGO) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Assured Guaranty as such a stock due to the following factors:

  • AGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.7 million.
  • AGO has traded 456,053 shares today.
  • AGO is trading at 1.58 times the normal volume for the stock at this time of day.
  • AGO crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AGO:

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The stock currently has a dividend yield of 1.9%. AGO has a PE ratio of 4.6. Currently there are 2 analysts that rate Assured Guaranty a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Assured Guaranty has been 2.5 million shares per day over the past 30 days. Assured Guaranty has a market cap of $3.9 billion and is part of the financial sector and insurance industry. The stock has a beta of 2.26 and a short float of 1.3% with 2.77 days to cover. Shares are down 2.8% year-to-date as of the close of trading on Thursday.

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 Assured Guaranty as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, compelling growth in net income 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:
  • AGO's very impressive revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues leaped by 221.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AGO's debt-to-equity ratio of 0.16 is very low, it is currently higher than that of the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Insurance industry and the overall market, ASSURED GUARANTY LTD'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 129.2% when compared to the same quarter one year prior, rising from -$144.00 million to $42.00 million.
  • Net operating cash flow has significantly increased by 821.42% to $101.00 million when compared to the same quarter last year. In addition, ASSURED GUARANTY LTD has also vastly surpassed the industry average cash flow growth rate of -72.50%.

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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