Barbarian At The Gate: Amsurg (AMSG)

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 $23.4 million.
  • AMSG has traded 307,473 shares today.
  • AMSG traded in a range 223.8% of the normal price range with a price range of $2.62.
  • AMSG traded above its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 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 37.3. Currently there are 6 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 417,200 shares per day over the past 30 days. Amsurg has a market cap of $2.4 billion and is part of the health care sector and health services industry. The stock has a beta of 1.34 and a short float of 10.8% with 6.43 days to cover. Shares are up 6.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Amsurg as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations 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:
  • AMSG's very impressive revenue growth greatly exceeded the industry average of 19.8%. Since the same quarter one year prior, revenues leaped by 91.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $122.47 million or 27.06% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.16%.
  • AMSURG CORP 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, AMSURG CORP increased its bottom line by earning $2.23 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus $2.23).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The debt-to-equity ratio of 1.36 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, AMSG has managed to keep a strong quick ratio of 1.79, which demonstrates the ability to cover short-term cash needs.

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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