Universal Insurance Holdings (UVE) Is Today's Strong On High Volume 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 Universal Insurance Holdings ( UVE) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Universal Insurance Holdings as such a stock due to the following factors:

  • UVE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.2 million.
  • UVE has traded 53,552 shares today.
  • UVE is trading at 4.43 times the normal volume for the stock at this time of day.
  • UVE is trading at a new high 4.32% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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 UVE:

Universal Insurance Holdings, Inc., through its subsidiaries, provides various property and casualty insurance products. It primarily underwrites homeowners' insurance products; and offers reinsurance intermediary brokerage services. The stock currently has a dividend yield of 2.1%. UVE has a PE ratio of 10.2. Currently there is 1 analyst that rates Universal Insurance Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Universal Insurance Holdings has been 294,500 shares per day over the past 30 days. Universal has a market cap of $664.7 million and is part of the financial sector and insurance industry. The stock has a beta of 2.64 and a short float of 7.2% with 8.59 days to cover. Shares are up 26.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Universal Insurance Holdings 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, expanding profit margins 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:
  • The revenue growth came in higher than the industry average of 22.0%. Since the same quarter one year prior, revenues rose by 32.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UVE's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 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 Insurance industry and the overall market, UNIVERSAL INSURANCE HLDGS's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for UNIVERSAL INSURANCE HLDGS is rather high; currently it is at 66.97%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.61% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 740.04% to $35.71 million when compared to the same quarter last year. In addition, UNIVERSAL INSURANCE HLDGS has also vastly surpassed the industry average cash flow growth rate of 33.69%.


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