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

  • CVS has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 3.16 mentions/day.
  • CVS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $292.1 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 CVS:

CVS Caremark Corporation, together with its subsidiaries, provides integrated pharmacy health care services in the United States. The company operates through Pharmacy Services and Retail Pharmacy segments. The stock currently has a dividend yield of 1.4%. CVS has a PE ratio of 19.5. Currently there are 14 analysts that rate CVS Caremark a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for CVS Caremark has been 3.7 million shares per day over the past 30 days. CVS Caremark has a market cap of $89.4 billion and is part of the services sector and retail industry. The stock has a beta of 0.89 and a short float of 0.9% with 2.50 days to cover. Shares are up 8.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CVS Caremark as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, 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 shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 6.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CVS CAREMARK CORP has improved earnings per share by 23.4% 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, CVS CAREMARK CORP increased its bottom line by earning $3.76 versus $3.03 in the prior year. This year, the market expects an improvement in earnings ($4.45 versus $3.76).
  • 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 Food & Staples Retailing industry average. The net income increased by 18.3% when compared to the same quarter one year prior, going from $954.00 million to $1,129.00 million.
  • Net operating cash flow has increased to $2,172.00 million or 32.43% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.84%.

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