Today's Unusual Social Activity Stock: Broadcom (BRCM)

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

  • BRCM has 12x the normal benchmarked social activity for this time of the day compared to its average of 5.40 mentions/day.
  • BRCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $186.7 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 BRCM:

Broadcom Corporation provides semiconductor solutions for wired and wireless communications. Its products offer voice, video, data, and multimedia connectivity in the home, office, and mobile environments. The stock currently has a dividend yield of 1.6%. BRCM has a PE ratio of 42.2. Currently there are 18 analysts that rate Broadcom a buy, 1 analyst rates it a sell, and 12 rate it a hold.

The average volume for Broadcom has been 6.4 million shares per day over the past 30 days. Broadcom has a market cap of $16.3 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.82 and a short float of 2.4% with 2.06 days to cover. Shares are up 5% 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 Broadcom as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • BRCM's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRCM has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for BROADCOM CORP is rather high; currently it is at 54.80%. Regardless of BRCM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.13% trails the industry average.
  • BRCM, with its decline in revenue, slightly underperformed the industry average of 1.5%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 33.1% when compared to the same quarter one year ago, falling from $251.00 million to $168.00 million.
  • The share price of BROADCOM CORP has not done very well: it is down 12.07% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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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