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

  • CTSH has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 2.37 mentions/day.
  • CTSH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $210.4 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 CTSH:

Cognizant Technology Solutions Corporation provides information technology (IT), consulting, and business process services worldwide. The company operates in four segments: Financial Services, Healthcare, Manufacturing/Retail/Logistics, and Other. CTSH has a PE ratio of 25.4. Currently there are 13 analysts that rate Cognizant Technology Solutions Corporation a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cognizant Technology Solutions Corporation has been 4.0 million shares per day over the past 30 days. Cognizant Technology has a market cap of $29.8 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.58 and a short float of 1.8% with 2.58 days to cover. Shares are down 5.8% 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 Cognizant Technology Solutions Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust 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 good cash flow from operations. 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 20.8%. Since the same quarter one year prior, revenues rose by 20.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CTSH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.17, which clearly demonstrates the ability to cover short-term cash needs.
  • COGNIZANT TECH SOLUTIONS has improved earnings per share by 15.2% 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 two years. We feel that this trend should continue. During the past fiscal year, COGNIZANT TECH SOLUTIONS increased its bottom line by earning $2.02 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $2.02).
  • 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 IT Services industry average. The net income increased by 16.3% when compared to the same quarter one year prior, going from $278.78 million to $324.33 million.
  • Net operating cash flow has increased to $505.87 million or 39.79% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.57%.

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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