American Equity Investment Life Holding Company (AEL) can make a big difference with a little luck

American Equity Investment Life Holding Company (NYSE: AEL) stock jumped 12.94% on Friday to $40.93 against a previous-day closing price of $36.24. With 1.24 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.56 million shares. During the session, the Insurance – Life company that operates in wider Financial sector, reached to the highest price of $40.98 whereas the lowest price it dropped to was $37.58. The 52-week range on AEL shows that it touched its highest point at $44.49 and its lowest point at $27.12 during that stretch. It currently has a 1-year price target of $41.33. With its current market cap of 3.79 billion, AEL has annualized dividend of $0.34 while the current yield stands at 0.83%. Beta for the stock currently stands at 1.05.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AEL was up-trending over the past week, with a rise of 10.77%, but this was up by 13.16% over a month. Three-month performance surged to 17.48% while six-month performance fell -2.78%. The stock gained 23.17% in the past year, while it has gained 5.16% so far this year. A look at the trailing 12-month EPS for AEL yields 7.38 with Next year EPS estimates of 4.99. For the next quarter, that number is 0.71. This implies an EPS growth rate of -34.00% for this year and 45.84% for next year. EPS is expected to grow by 24.30% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 36.20%.

Float and Shares Shorts:

At present, 96.87 million AEL shares are outstanding with a float of 91.52 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.06 million, which was 2.21% higher than short shares on Jun 14, 2022. In addition to Mr. Anant Bhalla as the firm’s Pres, CEO & Director, Mr. Axel Philippe Alain Andre serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 100.58% of AEL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 56.19% of AEL, in contrast to 42.89% held by mutual funds. Shares owned by individuals account for 25.11%. As the largest shareholder in AEL with 17.07% of the stake, Brookfield Asset Management PIC C holds 15,886,163 shares worth 15,886,163. A second-largest stockholder of AEL, BlackRock Fund Advisors, holds 12,398,573 shares, controlling over 13.32% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in AEL, holding 9,037,511 shares or 9.71% stake. With a 5.85% stake in AEL, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 5,447,500 shares are owned by the mutual fund manager. The Delaware Small Cap Value Fund, which owns about 2.86% of AEL stock, is the second-largest Mutual Fund holder. It holds 2,665,300 shares valued at 97.47 million. DFA US Small Cap Value Portfolio holds 2.63% of the stake in AEL, owning 2,442,493 shares worth 89.32 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AEL since 10 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AEL analysts setting a high price target of $47.00 and a low target of $38.00, the average target price over the next 12 months is $41.20. Based on these targets, AEL could surge 14.83% to reach the target high and fall by -7.16% to reach the target low. Reaching the average price target will result in a growth of 0.66% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AEL will report FY 2022 earnings on 02/08/2023. Analysts have provided yearly estimates in a range of $4.00 being high and $2.95 being low. For AEL, this leads to a yearly average estimate of $3.47. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. American Equity Investment Life Holding Company surprised analysts by $0.27 when it reported $0.98 EPS against a consensus estimate of $0.71. The surprise factor in the prior quarter was -$0.00. Based on analyst estimates, the high estimate for the next quarter is $1.13 and the low estimate is $0.59. The average estimate for the next quarter is thus $0.83.

Summary of Insider Activity:

Insiders traded AEL stock several times over the past three months with 10 Buys and 3 Sells. In these transactions, 51,808 shares were bought while 3,861,421 shares were sold. The number of buy transactions has increased to 20 while that of sell transactions has risen to 18 over the past year. The total number of shares bought during that period was 166,576 while 3,981,073 shares were sold.

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