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 American Equity Investment Life ( AEL) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified American Equity Investment Life as such a stock due to the following factors:

  • AEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.8 million.
  • AEL traded 78,802 shares today in the pre-market hours as of 7:52 AM, representing 12% of its average daily volume.

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More details on AEL:

American Equity Investment Life Holding Company, through its subsidiaries, develops and sells fixed index and fixed rate annuity products in 50 states and the District of Columbia. It issues fixed index annuities and fixed rate annuities, as well as single premium immediate annuities. The stock currently has a dividend yield of 0.7%. AEL has a PE ratio of 12. Currently there is 1 analyst that rates American Equity Investment Life a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for American Equity Investment Life has been 438,300 shares per day over the past 30 days. American Equity Investment Life has a market cap of $2.2 billion and is part of the financial sector and insurance industry. The stock has a beta of 1.84 and a short float of 4.4% with 4.98 days to cover. Shares are down 3.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Equity Investment Life as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • 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 125.5% when compared to the same quarter one year prior, rising from $36.74 million to $82.85 million.
  • AMERICAN EQTY INVT LIFE HLDG reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN EQTY INVT LIFE HLDG reported lower earnings of $1.57 versus $3.48 in the prior year. This year, the market expects an improvement in earnings ($2.48 versus $1.57).
  • AEL, with its decline in revenue, underperformed when compared the industry average of 10.6%. Since the same quarter one year prior, revenues fell by 34.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for AMERICAN EQTY INVT LIFE HLDG is currently lower than what is desirable, coming in at 31.06%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AEL's net profit margin of 18.78% compares favorably to the industry average.

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