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

  • WFC has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 14.20 mentions/day.
  • WFC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $734.6 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 WFC:

Wells Fargo & Company provides retail, commercial, and corporate banking services. The stock currently has a dividend yield of 2.9%. WFC has a PE ratio of 11.3. Currently there are 11 analysts that rate Wells Fargo a buy, 1 analyst rates it a sell, and 13 rate it a hold.

The average volume for Wells Fargo has been 17.8 million shares per day over the past 30 days. Wells Fargo has a market cap of $221.6 billion and is part of the financial sector and banking industry. The stock has a beta of 0.97 and a short float of 0.8% with 1.92 days to cover. Shares are up 22.1% 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 Wells Fargo as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • WELLS FARGO & CO has improved earnings per share by 19.5% 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, WELLS FARGO & CO increased its bottom line by earning $3.36 versus $2.82 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $3.36).
  • 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 Commercial Banks industry average. The net income increased by 19.4% when compared to the same quarter one year prior, going from $4,622.00 million to $5,519.00 million.
  • The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 92.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.57% significantly outperformed against the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, WELLS FARGO & CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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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