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

  • SCHW has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 5.80 mentions/day.
  • SCHW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $291.2 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 SCHW:

The Charles Schwab Corporation, through its subsidiaries, provides securities brokerage, banking, money management, and financial advisory services. The company operates through two segments, Investor Services and Advisor Services. The stock currently has a dividend yield of 0.9%. SCHW has a PE ratio of 34.3. Currently there are 2 analysts that rate Charles Schwab a buy, 3 analysts rate it a sell, and 7 rate it a hold.

The average volume for Charles Schwab has been 8.6 million shares per day over the past 30 days. Charles Schwab has a market cap of $32.7 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.56 and a short float of 3.1% with 3.16 days to cover. Shares are down 4.4% year-to-date as of the close of trading on Friday.

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 Charles Schwab as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 13.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SCHWAB (CHARLES) CORP 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 two years. We feel that this trend should continue. During the past fiscal year, SCHWAB (CHARLES) CORP increased its bottom line by earning $0.78 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.78).
  • 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 Capital Markets industry average. The net income increased by 51.2% when compared to the same quarter one year prior, rising from $211.00 million to $319.00 million.
  • 38.73% is the gross profit margin for SCHWAB (CHARLES) CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.86% is above that of the industry average.
  • Powered by its strong earnings growth of 53.33% and other important driving factors, this stock has surged by 44.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp 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 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.

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