Trade-Ideas: Assurant (AIZ) 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 Assurant ( AIZ) 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 Assurant as such a stock due to the following factors:

  • AIZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $38.7 million.
  • AIZ has traded 481,114 shares today.
  • AIZ traded in a range 227.3% of the normal price range with a price range of $1.57.
  • AIZ traded above its daily resistance level (quality: 155 days, meaning that the stock is crossing a resistance level set by the last 155 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 AIZ:

Assurant, Inc., through its subsidiaries, provides specialized insurance products and related services in North America, Latin America, Europe, and internationally. The stock currently has a dividend yield of 1.8%. AIZ has a PE ratio of 12. Currently there are no analysts that rate Assurant a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Assurant has been 591,000 shares per day over the past 30 days. Assurant has a market cap of $4.5 billion and is part of the financial sector and insurance industry. The stock has a beta of 1.01 and a short float of 2.1% with 2.62 days to cover. Shares are down 3.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Assurant 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 and attractive valuation levels. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 6.2%. 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.
  • Although AIZ's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average.
  • ASSURANT INC 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ASSURANT INC increased its bottom line by earning $6.42 versus $6.30 in the prior year. For the next year, the market is expecting a contraction of 26.8% in earnings ($4.70 versus $6.42).
  • The share price of ASSURANT INC has not done very well: it is down 5.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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