Unusual Social Activity Today Around Perrigo (PRGO)

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

  • PRGO has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 2.17 mentions/day.
  • PRGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $171.7 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 PRGO:

Perrigo is buying Canam Care as of Jan 2012 for $36. The stock currently has a dividend yield of 0.3%. PRGO has a PE ratio of 32.8. Currently there are 12 analysts that rate Perrigo a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Perrigo has been 1.3 million shares per day over the past 30 days. Perrigo has a market cap of $18.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.03 and a short float of 2.3% with 2.74 days to cover. Shares are down 9.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Perrigo as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 9.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $180.50 million or 19.92% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.54%.
  • 44.03% is the gross profit margin for PERRIGO CO PLC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PRGO's net profit margin of 4.78% significantly trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that PRGO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.56 is high and demonstrates strong liquidity.
  • PERRIGO CO PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, PERRIGO CO PLC increased its bottom line by earning $4.67 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($6.20 versus $4.67).

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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