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 RenaissanceRe Holdings ( RNR) 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 RenaissanceRe Holdings as such a stock due to the following factors:

  • RNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.6 million.
  • RNR has traded 95,440 shares today.
  • RNR traded in a range 203.2% of the normal price range with a price range of $2.56.
  • RNR traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 RNR:

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance coverages and related services in the United States and internationally. The company operates in three segments: Catastrophe Reinsurance, Specialty Reinsurance, and Lloyd's. The stock currently has a dividend yield of 1.1%. RNR has a PE ratio of 8. Currently there are 3 analysts that rate RenaissanceRe Holdings a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for RenaissanceRe Holdings has been 348,600 shares per day over the past 30 days. RenaissanceRe has a market cap of $4.8 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.79 and a short float of 5.3% with 7.50 days to cover. Shares are up 7.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates RenaissanceRe Holdings 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, increase in net income and expanding profit margins. 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 8.6%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RNR's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 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 10.8% when compared to the same quarter one year prior, going from $156.60 million to $173.44 million.
  • 47.58% is the gross profit margin for RENAISSANCERE HOLDINGS LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, RNR's net profit margin of 45.67% significantly outperformed against the industry.
  • RENAISSANCERE HOLDINGS LTD has improved earnings per share by 16.3% in the most recent quarter compared to 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, RENAISSANCERE HOLDINGS LTD reported lower earnings of $12.63 versus $14.84 in the prior year. For the next year, the market is expecting a contraction of 23.2% in earnings ($9.70 versus $12.63).

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