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

  • ETN has 14x the normal benchmarked social activity for this time of the day compared to its average of 0.73 mentions/day.
  • ETN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $161.1 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 ETN:

Eaton Corporation plc operates as a diversified power management company worldwide. The company operates through Electrical Americas, Electrical Rest of World, Cooper, Hydraulics, Aerospace, Truck, and Automotive segments. The stock currently has a dividend yield of 2.5%. ETN has a PE ratio of 20.5. Currently there are 12 analysts that rate Eaton Corporation a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Eaton Corporation has been 3.2 million shares per day over the past 30 days. Eaton has a market cap of $32.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.85 and a short float of 1.2% with 2.38 days to cover. Shares are up 25.7% year to date as of the close of trading on Monday.

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 Eaton Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 34.1%. 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 its closing price of one year ago, ETN's share price has jumped by 72.90%, 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, ETN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Electrical Equipment industry average. The net income increased by 21.5% when compared to the same quarter one year prior, going from $311.00 million to $378.00 million.
  • Net operating cash flow has significantly increased by 202.04% to $100.00 million when compared to the same quarter last year. In addition, EATON CORP PLC has also vastly surpassed the industry average cash flow growth rate of 6.67%.

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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