Today's Unusual Social Activity Stock: WellPoint (WLP)

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

  • WLP has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 1.35 mentions/day.
  • WLP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $204.6 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 WLP:

WellPoint, Inc., a health benefits company, through its subsidiaries, provides a range of medical products in the United States. The company offers a spectrum of network-based managed care health benefit plans to large and small employer, individual, Medicaid, and senior markets. The stock currently has a dividend yield of 1.4%. WLP has a PE ratio of 15.1. Currently there are 6 analysts that rate WellPoint a buy, no analysts rate it a sell, and 12 rate it a hold.

The average volume for WellPoint has been 1.7 million shares per day over the past 30 days. WellPoint has a market cap of $33.5 billion and is part of the health care sector and health services industry. The stock has a beta of 0.39 and a short float of 4.5% with 7.77 days to cover. Shares are up 32.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, WLP's share price has jumped by 44.75%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WLP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • WLP's revenue growth trails the industry average of 20.4%. Since the same quarter one year prior, revenues slightly increased by 4.4%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, WLP has a quick ratio of 1.57, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 151.88% to $1,071.00 million when compared to the same quarter last year. In addition, WELLPOINT INC has also vastly surpassed the industry average cash flow growth rate of 11.01%.

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