Norfolk Southern (NSC) 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 Norfolk Southern as such a stock due to the following factors:
- NSC has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 9.06 mentions/day.
- NSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $225.9 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 NSC:
Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods. As of December 31, 2014, it operated approximately 20,000 miles of road in 22 states and the District of Columbia. The stock currently has a dividend yield of 2.2%. NSC has a PE ratio of 17.1. Currently there are 7 analysts that rate Norfolk Southern a buy, 1 analyst rates it a sell, and 8 rate it a hold.
The average volume for Norfolk Southern has been 2.2 million shares per day over the past 30 days. Norfolk Southern has a market cap of $33.6 billion and is part of the services sector and transportation industry. The stock has a beta of 1.07 and a short float of 2% with 3.21 days to cover. Shares are down 1.3% year-to-date as of the close of trading on Friday.
Analysis:
rates Norfolk Southern as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- NORFOLK SOUTHERN CORP reported flat earnings per share in the most recent quarter. 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, NORFOLK SOUTHERN CORP increased its bottom line by earning $6.39 versus $6.04 in the prior year. This year, the market expects an improvement in earnings ($6.85 versus $6.39).
- 39.41% is the gross profit margin for NORFOLK SOUTHERN 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 17.80% trails the industry average.
- 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.
- You can view the full Norfolk Southern Ratings Report.
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