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

  • UTX has 17x the normal benchmarked social activity for this time of the day compared to its average of 2.27 mentions/day.
  • UTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $332.2 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 UTX:

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. The stock currently has a dividend yield of 2.1%. UTX has a PE ratio of 18.9. Currently there are 15 analysts that rate United Technologies a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for United Technologies has been 3.4 million shares per day over the past 30 days. United has a market cap of $94.2 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.16 and a short float of 0.9% with 2.25 days to cover. Shares are up 24.5% 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 United Technologies as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 16.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • UNITED TECHNOLOGIES CORP has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITED TECHNOLOGIES CORP increased its bottom line by earning $5.35 versus $5.33 in the prior year. This year, the market expects an improvement in earnings ($6.12 versus $5.35).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 283.6% when compared to the same quarter one year prior, rising from $330.00 million to $1,266.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that UTX's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 35.39% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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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