American Electric Power (AEP) 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
(
) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified American Electric Power as such a stock due to the following factors:
- AEP has 17x the normal benchmarked social activity for this time of the day compared to its average of 3.97 mentions/day.
- AEP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $166.6 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 AEP:
American Electric Power Company, Inc., a public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers. The stock currently has a dividend yield of 3.8%. AEP has a PE ratio of 16.8. Currently there are 6 analysts that rate American Electric Power a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for American Electric Power has been 2.8 million shares per day over the past 30 days. American Electric has a market cap of $27.5 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.39 and a short float of 0.9% with 1.52 days to cover. Shares are down 6.6% year-to-date as of the close of trading on Tuesday.
Analysis:
rates American Electric Power as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, increase in stock price during the past year and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- AMERICAN ELECTRIC POWER CO's earnings per share declined by 45.1% 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, AMERICAN ELECTRIC POWER CO increased its bottom line by earning $3.35 versus $3.04 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $3.35).
- 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. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, AMERICAN ELECTRIC POWER CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full American Electric Power Ratings Report.
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