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

  • AMAT has 14x the normal benchmarked social activity for this time of the day compared to its average of 3.13 mentions/day.
  • AMAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $294.1 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 AMAT:

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. The stock currently has a dividend yield of 2.2%. AMAT has a PE ratio of 84.7. Currently there are 6 analysts that rate Applied Materials a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Applied Materials has been 10.9 million shares per day over the past 30 days. Applied has a market cap of $21.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.76 and a short float of 3.8% with 2.84 days to cover. Shares are up 1.3% 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 Applied Materials 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues rose by 20.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AMAT's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • APPLIED MATERIALS INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, APPLIED MATERIALS INC increased its bottom line by earning $0.21 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.21).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 135.5% when compared to the same quarter one year prior, rising from -$515.00 million to $183.00 million.
  • 44.72% is the gross profit margin for APPLIED MATERIALS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, AMAT's net profit margin of 9.20% significantly 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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