Today's Unusual Social Activity Stock: Sapient (SAPE)

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

  • SAPE has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 2.45 mentions/day.
  • SAPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $153.1 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 SAPE:

Sapient Corporation provides strategy, marketing, and technology services that enable clients identify and act upon opportunities to improve their business performance. It operates in three segments: SapientNitro, Sapient Global Markets, and Sapient Government Services. SAPE has a PE ratio of 28.9. Currently there are 2 analysts that rate Sapient a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Sapient has been 850,800 shares per day over the past 30 days. Sapient has a market cap of $2.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.32 and a short float of 2.9% with 0.51 days to cover. Shares are up 41.7% 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 Sapient 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, increase in net income, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 16.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • SAPE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, SAPE has a quick ratio of 2.14, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 2.2% when compared to the same quarter one year prior, going from $22.79 million to $23.29 million.
  • SAPIENT CORP 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, SAPIENT CORP increased its bottom line by earning $0.55 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.55).
  • 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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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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