Trade-Ideas LLC identified

Gap

(

GPS

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

  • GPS has 16x the normal benchmarked social activity for this time of the day compared to its average of 7.32 mentions/day.
  • GPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $166.2 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 GPS:

The Gap, Inc. operates as an apparel retail company worldwide. It offers apparel, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, Old Navy, Athleta, and Intermix brand names. The stock currently has a dividend yield of 3.4%. GPS has a PE ratio of 11. Currently there are 2 analysts that rate Gap a buy, 6 analysts rate it a sell, and 13 rate it a hold.

The average volume for Gap has been 6.4 million shares per day over the past 30 days. Gap has a market cap of $11.0 billion and is part of the services sector and retail industry. Shares are up 11.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Gap as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • 41.22% is the gross profit margin for GAP INC which we consider to be strong. Regardless of GPS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.42% trails the industry average.
  • Net operating cash flow has decreased to $92.00 million or 22.03% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has significantly decreased by 29.3% when compared to the same quarter one year ago, falling from $351.00 million to $248.00 million.

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