Validus Holdings (VR) Reaches New Lifetime High Today

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 Validus Holdings ( VR) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Validus Holdings as such a stock due to the following factors:

  • VR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.8 million.
  • VR has traded 45,658 shares today.
  • VR is trading at a new lifetime high.

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More details on VR:

Validus Holdings, Ltd. provides reinsurance coverage, insurance coverage, and insurance linked securities management services worldwide. It operates through three segments: Validus Re, AlphaCat, and Talbot. The stock currently has a dividend yield of 3%. VR has a PE ratio of 8.7. Currently there are 5 analysts that rate Validus Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Validus Holdings has been 679,700 shares per day over the past 30 days. Validus has a market cap of $3.5 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.59 and a short float of 2% with 2.25 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Tuesday.

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 Validus Holdings as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • VALIDUS HOLDINGS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VALIDUS HOLDINGS LTD increased its bottom line by earning $4.88 versus $3.97 in the prior year. This year, the market expects an improvement in earnings ($4.95 versus $4.88).
  • 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 on the basis of return on equity, VALIDUS HOLDINGS LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The revenue fell significantly faster than the industry average of 22.6%. Since the same quarter one year prior, revenues fell by 28.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.39, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • In its most recent trading session, VR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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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