Today's Unusual Social Activity Stock: Devon Energy (DVN)

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

  • DVN has 19x the normal benchmarked social activity for this time of the day compared to its average of 3.84 mentions/day.
  • DVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $261.9 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 DVN:

Devon Energy Corporation, an independent energy company, is engaged primarily in the exploration, development, and production of oil, natural gas, and natural gas liquids. The stock currently has a dividend yield of 1.6%. DVN has a PE ratio of 14.6. Currently there are 16 analysts that rate Devon Energy a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Devon Energy has been 3.6 million shares per day over the past 30 days. Devon Energy has a market cap of $23.9 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.53 and a short float of 1.2% with 1.11 days to cover. Shares are down 9.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Devon Energy as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 45.9%. 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.
  • The current debt-to-equity ratio, 0.58, 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 0.86 is somewhat weak and could be cause for future problems.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 1.2% when compared to the same quarter one year ago, dropping from $683.00 million to $675.00 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, DVN has underperformed the S&P 500 Index, declining 8.05% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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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