Willis Group Holdings (WSH) Flagged As A Storm The Castle Stock

Trade-Ideas LLC identified Willis Group Holdings ( WSH) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Willis Group Holdings as such a stock due to the following factors:

  • WSH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.9 million.
  • WSH has traded 1.5 million shares today.
  • WSH is trading at 1.64 times the normal volume for the stock at this time of day.
  • WSH crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on WSH:

Willis Group Holdings Public Limited Company provides insurance brokerage, reinsurance, and risk management consulting services worldwide. The stock currently has a dividend yield of 2.7%. WSH has a PE ratio of 18. Currently there are 7 analysts that rate Willis Group Holdings a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Willis Group Holdings has been 1.1 million shares per day over the past 30 days. Willis Group has a market cap of $8.4 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.93 and a short float of 5.1% with 4.38 days to cover. Shares are down 61.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Willis Group Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, solid stock price performance and impressive record of earnings per share growth. 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 15.8%. Since the same quarter one year prior, revenues slightly increased by 4.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. In comparison to the other companies in the Insurance industry and the overall market, WILLIS GROUP HOLDINGS PLC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • 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 1771.4% when compared to the same quarter one year prior, rising from -$7.00 million to $117.00 million.
  • After a year of stock price fluctuations, the net result is that WSH's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • WILLIS GROUP HOLDINGS PLC 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, WILLIS GROUP HOLDINGS PLC reported lower earnings of $1.99 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus $1.99).

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