Validus Holdings (VR) Hits New Lifetime High

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 Validus Holdings ( VR) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Validus Holdings as such a stock due to the following factors:

  • VR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.7 million.
  • VR has traded 6,411 shares today.
  • VR is trading at a new lifetime high.

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More details on VR:

Validus Holdings, Ltd. provides reinsurance coverage, insurance coverage, and insurance linked securities management services worldwide. It operates through four segments: Validus Re, AlphaCat, Talbot, and Western World. The stock currently has a dividend yield of 2.8%. VR has a PE ratio of 8. Currently there are 4 analysts that rate Validus Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Validus Holdings has been 497,500 shares per day over the past 30 days. Validus has a market cap of $3.8 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.92 and a short float of 1.2% with 1.59 days to cover. Shares are up 8.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Validus Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, expanding profit margins and notable return on equity. 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 9.5%. Since the same quarter one year prior, revenues rose by 19.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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 greatly exceeded that of the S&P 500, but is less than that of the Insurance industry average. The net income increased by 6.8% when compared to the same quarter one year prior, going from $162.39 million to $173.41 million.
  • The gross profit margin for VALIDUS HOLDINGS LTD is rather high; currently it is at 50.99%. Regardless of VR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VR's net profit margin of 25.13% significantly outperformed against the industry.
  • 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, VALIDUS HOLDINGS LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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