With growth stocks like Nvidia (NVDA) and Alphabet (GOOGL) experiencing challenges during a market correction, the insurance sector is gaining prominence on Wall Street. Several companies within this sector have been added to the IBD Breakout Stocks Index, with Ryan Specialty (RYAN) standing out.
Other leading insurance companies, including Allstate (ALL), Aon (AON), W.R. Berkley (WRB), Chubb (CB), Brown & Brown (BRO), and Hartford Insurance Group (HIG), are either positioned within or near a buy zone. Among these, Ryan Specialty boasts a “perfect” Composite Rating of 99, the highest possible score.
Based in Chicago, Ryan Specialty provides specialized solutions for insurance brokers, agents, and carriers, offering services in distribution, underwriting, product development, administration, and risk management. The company also acts as a wholesale broker and managing underwriter with delegated authority from insurance carriers. Founded in 2010 by Patrick G. Ryan, the former chairman and CEO of Aon Corporation, Ryan Specialty has attracted investor interest due to its robust and consistent earnings and sales growth.
Ryan Specialty has been added to the list of new buys by prominent mutual funds, alongside Aon and Brown & Brown. Arthur J. Gallagher (AJG) and Skyward Specialty Insurance (SKWD) were among the other insurance stocks that made the list.
Over the past eight quarters, Ryan Specialty has achieved sales growth ranging from 18% to 25%. Its bottom-line gains have ranged from 8% to 35% during the same period. In its most recent report on February 20, the insurer reported revenue growth of 25% to $663.5 million and earnings growth of 29% to 45 cents per share.
Ryan Specialty, recognized as the IBD Stock of the Day on March 12, has experienced three consecutive quarters of increasing fund ownership and holds an A Accumulation/Distribution Rating.
As Hartford Insurance and other insurance stocks explore new buy zones, Ryan Specialty stock also shows signs of a potential breakout. Shares of Ryan are approaching a buy point of 71.33.
One positive indicator is Ryan’s recent base count reset, which involved undercutting the low in its previous chart pattern. This positions the current cup with handle as a first-stage base, which typically has a higher likelihood of success compared to later-stage patterns. In February, Ryan Specialty’s technical strength improved when its 21-day exponential moving average surpassed its 50-day line, and the stock has maintained support at the 21-day benchmark.
While insurance stocks like Ryan Specialty present a positive outlook in a challenging market, investors should still exercise caution and adhere to risk management principles when considering new investments in the current environment.
