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

  • ABT has 11x the normal benchmarked social activity for this time of the day compared to its average of 4.53 mentions/day.
  • ABT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $222.2 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 ABT:

Abbott Laboratories is engaged in the discovery, development, manufacture, and sale of health care products worldwide. The stock currently has a dividend yield of 2.2%. ABT has a PE ratio of 28.9. Currently there are 10 analysts that rate Abbott Laboratories a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Abbott Laboratories has been 7.6 million shares per day over the past 30 days. Abbott has a market cap of $60.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.75 and a short float of 0.7% with 1.79 days to cover. Shares are up 2.4% 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 Abbott Laboratories 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, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
  • ABBOTT LABORATORIES's earnings per share declined by 35.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ABBOTT LABORATORIES increased its bottom line by earning $1.50 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($2.21 versus $1.50).
  • The gross profit margin for ABBOTT LABORATORIES is rather high; currently it is at 57.53%. Regardless of ABT'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 7.15% trails the industry average.
  • Net operating cash flow has decreased to $336.00 million or 26.99% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Health Care Equipment & Supplies industry. The net income has significantly decreased by 31.1% when compared to the same quarter one year ago, falling from $544.66 million to $375.00 million.

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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