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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

Illinois Tool Works

(

ITW

) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Illinois Tool Works as such a stock due to the following factors:

  • ITW has 11x the normal benchmarked social activity for this time of the day compared to its average of 2.50 mentions/day.
  • ITW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $173.8 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 ITW:

Illinois Tool Works Inc. manufactures and sells a range of industrial products and equipment worldwide. The stock currently has a dividend yield of 2.1%. ITW has a PE ratio of 15.0. Currently there are 8 analysts that rate Illinois Tool Works a buy, 2 analysts rate it a sell, and 6 rate it a hold.

TheStreet Recommends

The average volume for Illinois Tool Works has been 1.8 million shares per day over the past 30 days. Illinois Tool Works has a market cap of $34.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.23 and a short float of 1.7% with 2.86 days to cover. Shares are down 6% year-to-date as of the close of trading on Tuesday.

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 Illinois Tool Works as a

buy

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins, solid stock price performance and good cash flow from operations. 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 current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • 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 Machinery industry and the overall market, ILLINOIS TOOL WORKS's return on equity exceeds that of both the industry average and the S&P 500.
  • 38.00% is the gross profit margin for ILLINOIS TOOL WORKS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.66% is above that of the industry average.
  • Compared to its closing price of one year ago, ITW's share price has jumped by 27.54%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ITW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $811.00 million or 27.71% when compared to the same quarter last year. Despite an increase in cash flow, ILLINOIS TOOL WORKS's average is still marginally south of the industry average growth rate of 29.61%.

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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