Today's Unusual Social Activity Stock: Capital One Financial (COF)

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 Capital One Financial ( COF) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Capital One Financial as such a stock due to the following factors:

  • COF has 11x the normal benchmarked social activity for this time of the day compared to its average of 1.64 mentions/day.
  • COF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $174.1 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 COF:

Capital One Financial Corporation operates as the bank holding company for Capital One Bank (USA), National Association (COBNA); and Capital One, National Association (CONA), which provide various financial products and services in the United States, the United Kingdom, and Canada. The stock currently has a dividend yield of 1.6%. COF has a PE ratio of 10.0. Currently there are 16 analysts that rate Capital One Financial a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Capital One Financial has been 2.8 million shares per day over the past 30 days. Capital One Financial has a market cap of $41.9 billion and is part of the financial sector and financial services industry. Shares are down 4.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Capital One Financial as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • 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 33.13% 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, COF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • COF, with its decline in revenue, slightly underperformed the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CAPITAL ONE FINANCIAL CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CAPITAL ONE FINANCIAL CORP increased its bottom line by earning $7.35 versus $6.70 in the prior year. For the next year, the market is expecting a contraction of 7.5% in earnings ($6.80 versus $7.35).

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