Alliance Data Systems (ADS): Stock With Unusual Social Activity

Trade-Ideas LLC identified Alliance Data Systems (ADS) as an unusual social activity candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Alliance Data Systems

(

ADS

) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Alliance Data Systems 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 2.68 mentions/day.
  • ADS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $192.1 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.

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More details on ADS:

Alliance Data Systems Corporation provides marketing and loyalty solutions in the United States and internationally. ADS has a PE ratio of 24. Currently there are 17 analysts that rate Alliance Data Systems a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Alliance Data Systems has been 824,200 shares per day over the past 30 days. Alliance Data Systems has a market cap of $12.6 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.73 and a short float of 3.4% with 3.34 days to cover. Shares are down 22.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Alliance Data Systems as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $257.40 million or 47.33% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 31.57%.
  • ALLIANCE DATA SYSTEMS CORP's earnings per share improvement from the most recent quarter was slightly positive. 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 $8.86 versus $7.87 in the prior year. This year, the market expects an improvement in earnings ($16.77 versus $8.86).
  • 40.11% is the gross profit margin for ALLIANCE DATA SYSTEMS CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.42% trails the industry average.

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