Trade-Ideas: Everest Re Group (RE) 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 Everest Re Group ( RE) 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 Everest Re Group as such a stock due to the following factors:

  • RE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.1 million.
  • RE has traded 130,874 shares today.
  • RE traded in a range 223.8% of the normal price range with a price range of $4.14.
  • RE traded above its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 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 RE:

Everest Re Group, Ltd., through its subsidiaries, provides reinsurance and insurance products. It operates through the U.S. Reinsurance, Insurance, International, Bermuda, and Mt. Logan Re segments. The U.S. The stock currently has a dividend yield of 1.9%. RE has a PE ratio of 6.5. Currently there is 1 analyst that rates Everest Re Group a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Everest Re Group has been 314,000 shares per day over the past 30 days. Everest Re Group has a market cap of $7.3 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.61 and a short float of 3.7% with 6.20 days to cover. Shares are up 2.7% 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 Everest Re Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and increase in stock price during the past year. 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:
  • RE's revenue growth trails the industry average of 24.2%. Since the same quarter one year prior, revenues slightly increased by 7.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RE's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market, EVEREST RE GROUP LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $223.34 million or 31.23% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.06%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.

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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