Emerson Electric (EMR): Stock With Unusual Social Activity

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

  • EMR has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 1.45 mentions/day.
  • EMR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $210.3 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 EMR:

Emerson Electric Co., a diversified technology company, designs and supplies products and technology, and delivers engineering services and solutions to the industrial, commercial, and consumer markets worldwide. The stock currently has a dividend yield of 2.7%. EMR has a PE ratio of 23.2. Currently there are 6 analysts that rate Emerson Electric a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Emerson Electric has been 2.8 million shares per day over the past 30 days. Emerson Electric has a market cap of $44.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.23 and a short float of 1.2% with 2.51 days to cover. Shares are down 8.8% year-to-date as of the close of trading on Monday.

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 Emerson Electric as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • 43.84% is the gross profit margin for EMERSON ELECTRIC CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.41% is above that of the industry average.
  • EMERSON ELECTRIC CO reported flat earnings per share in the most recent quarter. 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, EMERSON ELECTRIC CO increased its bottom line by earning $2.76 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $2.76).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.8%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • EMR's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.93 is weak.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, EMERSON ELECTRIC CO'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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