Today's Unusual Social Activity Stock: Eaton (ETN)

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

  • ETN has 13x the normal benchmarked social activity for this time of the day compared to its average of 1.32 mentions/day.
  • ETN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $161.6 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 ETN:

Eaton Corporation plc operates as a power management company worldwide. The stock currently has a dividend yield of 2.9%. ETN has a PE ratio of 20.1. Currently there are 9 analysts that rate Eaton a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Eaton has been 3.0 million shares per day over the past 30 days. Eaton has a market cap of $31.9 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.72 and a short float of 1% with 2.29 days to cover. Shares are down 12% 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 Eaton as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, 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:
  • ETN's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 2.9%. 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 slightly increased to $633.00 million or 3.94% when compared to the same quarter last year. In addition, EATON CORP PLC has also modestly surpassed the industry average cash flow growth rate of 3.06%.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.

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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