Trade-Ideas LLC identified Universal Insurance Holdings ( UVE) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Universal Insurance Holdings as such a stock due to the following factors:

  • UVE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.1 million.
  • UVE has traded 406,693 shares today.
  • UVE is down 3.3% today.
  • UVE was up 7% yesterday.

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More details on UVE:

Universal Insurance Holdings, Inc., through its subsidiaries, provides various property and casualty insurance products. The company primarily underwrites homeowners' insurance products; and offers reinsurance intermediary brokerage services. The stock currently has a dividend yield of 2.2%. UVE has a PE ratio of 8. Currently there is 1 analyst that rates Universal Insurance Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Universal Insurance Holdings has been 1.2 million shares per day over the past 30 days. Universal has a market cap of $769.7 million and is part of the financial sector and insurance industry. The stock has a beta of 1.99 and a short float of 11.5% with 3.34 days to cover. Shares are up 13.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Universal Insurance Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth 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:
  • UVE's very impressive revenue growth greatly exceeded the industry average of 15.7%. Since the same quarter one year prior, revenues leaped by 51.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UVE's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 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.
  • UNIVERSAL INSURANCE HLDGS has improved earnings per share by 37.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNIVERSAL INSURANCE HLDGS increased its bottom line by earning $2.07 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.07).
  • 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 42.0% when compared to the same quarter one year prior, rising from $21.34 million to $30.30 million.

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