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.

Trade-Ideas LLC identified

NetScout Systems

(

NTCT

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

  • NTCT has 11x the normal benchmarked social activity for this time of the day compared to its average of 3.29 mentions/day.
  • NTCT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $160.4 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 NTCT:

NetScout Systems, Inc., together with its subsidiaries, designs, develops, manufactures, markets, licenses, sells, and supports network, application, and service assurance solutions in the United States, Europe, Asia, and internationally. NTCT has a PE ratio of 25. Currently there are 4 analysts that rate NetScout Systems a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for NetScout Systems has been 1.5 million shares per day over the past 30 days. NetScout Systems has a market cap of $1.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.85 and a short float of 30.3% with 2.26 days to cover. Shares are up 2.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NetScout Systems as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels 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 11.5%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NTCT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NTCT has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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 Software industry and the overall market, NETSCOUT SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for NETSCOUT SYSTEMS INC is currently very high, coming in at 84.14%. It has increased from the same quarter the previous year.

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