Today's Unusual Social Activity Stock: Devon Energy (DVN)

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

  • DVN has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 2.56 mentions/day.
  • DVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $314.7 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 DVN:

Devon Energy Corporation, an independent energy company, engages primarily in exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs). The stock currently has a dividend yield of 1.5%. Currently there are 8 analysts that rate Devon Energy a buy, no analysts rate it a sell, and 12 rate it a hold.

The average volume for Devon Energy has been 3.0 million shares per day over the past 30 days. Devon Energy has a market cap of $24.3 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.77 and a short float of 1.9% with 1.56 days to cover. Shares are up 14.9% year to date as of the close of trading on Tuesday.

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 Devon Energy as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 45.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • DEVON ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DEVON ENERGY CORP swung to a loss, reporting -$0.48 versus $5.13 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus -$0.48).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DEVON ENERGY CORP's return on equity significantly trails that of both the industry average and 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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