Today's Unusual Social Activity Stock: Covidien (COV)

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

  • COV has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 4.23 mentions/day.
  • COV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $694.1 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 COV:

Covidien plc develops, manufactures, and sells healthcare products for use in clinical and home settings worldwide. The stock currently has a dividend yield of 1.8%. COV has a PE ratio of 20.6. Currently there are 15 analysts that rate Covidien a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Covidien has been 2.0 million shares per day over the past 30 days. Covidien has a market cap of $32.5 billion and is part of the health care sector and health services industry. The stock has a beta of 1.11 and a short float of 1.3% with 0.77 days to cover. Shares are up 5.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Covidien as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, notable return on equity and reasonable valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • COVIDIEN PLC has improved earnings per share by 21.3% 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 year. We feel that this trend should continue. During the past fiscal year, COVIDIEN PLC increased its bottom line by earning $3.40 versus $3.37 in the prior year. This year, the market expects an improvement in earnings ($4.00 versus $3.40).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income increased by 0.5% when compared to the same quarter one year prior, going from $439.00 million to $441.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, COVIDIEN PLC's return on equity exceeds that of both the industry average and the S&P 500.

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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