Arch Capital Group (ACGL) Hits 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.

Trade-Ideas LLC identified Arch Capital Group ( ACGL) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Arch Capital Group as such a stock due to the following factors:

  • ACGL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.1 million.
  • ACGL has traded 133,987 shares today.
  • ACGL is trading at a new lifetime high.

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More details on ACGL:

Arch Capital Group Ltd., through its subsidiaries, provides property, casualty, and mortgage insurance and reinsurance products worldwide. ACGL has a PE ratio of 1. Currently there are 5 analysts that rate Arch Capital Group a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Arch Capital Group has been 462,400 shares per day over the past 30 days. Arch Capital Group has a market cap of $8.1 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.86 and a short float of 1.4% with 3.64 days to cover. Shares are up 11.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Arch Capital Group 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, solid stock price performance and compelling growth in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

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 rose by 14.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ACGL's debt-to-equity ratio is very low at 0.14 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, ARCH CAPITAL GROUP LTD's return on equity exceeds that of both the industry average and 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 55.3% when compared to the same quarter one year prior, rising from $182.50 million to $283.34 million.

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