Unusual Social Activity Around Eaton Corporation (ETN) Today

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

  • ETN has 15x the normal benchmarked social activity for this time of the day compared to its average of 2.33 mentions/day.
  • ETN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $212.8 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 ETN:

Eaton Corporation plc operates as a diversified power management company worldwide. The company operates through Electrical Americas, Electrical Rest of World, Cooper, Hydraulics, Aerospace, Truck, and Automotive segments. The stock currently has a dividend yield of 2.3%. ETN has a PE ratio of 22.1. Currently there are 12 analysts that rate Eaton Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Eaton Corporation has been 2.5 million shares per day over the past 30 days. Eaton has a market cap of $34.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.64 and a short float of 1.1% with 1.55 days to cover. Shares are down 7.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Eaton Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, reasonable valuation levels, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 41.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 29.78% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ETN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Electrical Equipment industry average. The net income increased by 47.8% when compared to the same quarter one year prior, rising from $345.00 million to $510.00 million.
  • 35.21% is the gross profit margin for EATON CORP PLC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.09% trails 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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