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

  • DISCA has 17x the normal benchmarked social activity for this time of the day compared to its average of 0.73 mentions/day.
  • DISCA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $155.0 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DISCA with the Ticky from Trade-Ideas. See the FREE profile for DISCA NOW at Trade-Ideas

More details on DISCA:

Discovery Communications, Inc. operates as a non fiction media company worldwide. The company operates through three segments: U.S. Networks, International Networks, and Education. It provides original and purchased content across various distribution platforms. DISCA has a PE ratio of 30.0. Currently there are 8 analysts that rate Discovery Communications a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Discovery Communications has been 1.4 million shares per day over the past 30 days. Discovery has a market cap of $12.1 billion and is part of the services sector and media industry. The stock has a beta of 1.36 and a short float of 5.2% with 3.47 days to cover. Shares are down 8.4% year-to-date as of the close of trading on Thursday.

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 Discovery Communications as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 27.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 Media industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $205.00 million to $255.00 million.
  • Net operating cash flow has increased to $460.00 million or 20.41% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.38%.
  • Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Despite the fact that DISCA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.66 is high and demonstrates strong liquidity.
  • 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, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
null

If you liked this article you might like

Viacom Stock Rises as CEO Touts Coming of Entertainment Skinny Bundle

Cable Channels Unite to Bring Non-Sports Streaming Service to Viewers

Disney's Dismal Outlook Leaves Media Companies in Need of Major Pep Talk

Disney Hasn't Been Killed by Netflix, Analyst Hints

Facebook Launches Video Service 'Watch'