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

  • EBAY has 11x the normal benchmarked social activity for this time of the day compared to its average of 11.62 mentions/day.
  • EBAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $451.9 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 EBAY:

eBay Inc. provides online platforms, tools, and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. EBAY has a PE ratio of 27.2. Currently there are 24 analysts that rate eBay a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for eBay has been 9.4 million shares per day over the past 30 days. eBay has a market cap of $71.4 billion and is part of the services sector and retail industry. The stock has a beta of 0.88 and a short float of 1.3% with 1.88 days to cover. Shares are up 8.2% year to date as of the close of trading on Wednesday.

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 eBay 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, reasonable valuation levels, good cash flow from operations 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 22.6%. Since the same quarter one year prior, revenues rose by 14.1%. 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.
  • Although EBAY's debt-to-equity ratio of 0.21 is very low, it is currently higher than that of the industry average. To add to this, EBAY has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $1,011.00 million or 31.64% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.01%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.

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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