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

  • LEN has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 6.69 mentions/day.
  • LEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $235.9 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 LEN:

Lennar Corporation, together with its subsidiaries, engages in homebuilding, financial services, and real estate businesses in the United States. The stock currently has a dividend yield of 0.4%. LEN has a PE ratio of 19.8. Currently there are 8 analysts that rate Lennar Corporation a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Lennar Corporation has been 6.5 million shares per day over the past 30 days. Lennar has a market cap of $5.9 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.67 and a short float of 23.3% with 4.58 days to cover. Shares are down 6.2% year to date as of the close of trading on Friday.

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 Lennar Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • LEN's very impressive revenue growth greatly exceeded the industry average of 21.7%. Since the same quarter one year prior, revenues leaped by 53.3%. 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.
  • Even though the current debt-to-equity ratio is 1.43, it is still below the industry average, suggesting that this level of debt is acceptable within the Household Durables industry.
  • In its most recent trading session, LEN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • LENNAR CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LENNAR CORP increased its bottom line by earning $3.10 versus $0.48 in the prior year. For the next year, the market is expecting a contraction of 38.3% in earnings ($1.91 versus $3.10).
  • The gross profit margin for LENNAR CORP is rather low; currently it is at 24.07%. Regardless of LEN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LEN's net profit margin of 9.63% compares favorably to the industry average.

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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