Trade-Ideas: Alliance Data Systems Corporation (ADS) Is Today's Unusual Social Activity Stock
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 or Stephanie Link.Trade-Ideas LLC identified Alliance Data Systems Corporation (ADS) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Alliance Data Systems Corporation as such a stock due to the following factors:
- ADS has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 1.13 mentions/day.
- ADS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $271.3 million.
Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.EXCLUSIVE OFFER: Get the inside scoop on opportunities in ADS with the Ticky from Trade-Ideas. See the FREE profile for ADS NOW at Trade-IdeasMore details on ADS: Alliance Data Systems Corporation provides marketing and loyalty solutions primarily in North America. The company operates in three segments: LoyaltyOne, Epsilon, and Private Label Services and Credit. ADS has a PE ratio of 38.3. Currently there are 13 analysts that rate Alliance Data Systems Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.The average volume for Alliance Data Systems Corporation has been 594,800 shares per day over the past 30 days. Alliance Data Systems has a market cap of $12.8 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.97 and a short float of 16.2% with 6.60 days to cover. Shares are down 1.8% year-to-date as of the close of trading on Monday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Alliance Data Systems Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 22.7%. Since the same quarter one year prior, revenues rose by 20.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ALLIANCE DATA SYSTEMS CORP has improved earnings per share by 9.2% 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, ALLIANCE DATA SYSTEMS CORP increased its bottom line by earning $6.60 versus $5.46 in the prior year. This year, the market expects an improvement in earnings ($9.96 versus $6.60).
- The net income growth from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 11.2% when compared to the same quarter one year prior, going from $119.55 million to $132.88 million.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 76.01% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- 42.69% is the gross profit margin for ALLIANCE DATA SYSTEMS CORP which we consider to be strong. Regardless of ADS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.11% trails the industry average.
- You can view the full Alliance Data Systems Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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