Trade-Ideas: PartnerRe (PRE) 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.

Trade-Ideas LLC identified PartnerRe ( PRE) 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 PartnerRe as such a stock due to the following factors:

  • PRE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $84.7 million.
  • PRE has traded 1.4 million shares today.
  • PRE traded in a range 387.2% of the normal price range with a price range of $4.37.
  • PRE traded above its daily resistance level (quality: 532 days, meaning that the stock is crossing a resistance level set by the last 532 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 PRE:

PartnerRe Ltd., through its subsidiaries, provides reinsurance and certain specialty insurance services worldwide. It operates in three segments: Non-life, Life and Health, and Corporate and Other. The stock currently has a dividend yield of 2.2%. PRE has a PE ratio of 6.9. Currently there is 1 analyst that rates PartnerRe a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for PartnerRe has been 694,800 shares per day over the past 30 days. PartnerRe has a market cap of $6.1 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.58 and a short float of 1.7% with 1.40 days to cover. Shares are up 12.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PartnerRe as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • PRE's debt-to-equity ratio is very low at 0.11 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 on the basis of return on equity, PARTNERRE LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • PRE, with its decline in revenue, slightly underperformed the industry average of 2.7%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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