Quest Diagnostics (DGX): Stock With Unusual Social Activity

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

  • DGX has 17x the normal benchmarked social activity for this time of the day compared to its average of 1.74 mentions/day.
  • DGX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $155.7 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 DGX:

Quest Diagnostics Incorporated provides diagnostic testing information services in the United States and internationally. The company operates in two businesses, Diagnostic Information Services and Diagnostic Solutions. The stock currently has a dividend yield of 2.1%. DGX has a PE ratio of 17.8. Currently there are 2 analysts that rate Quest Diagnostics a buy, 3 analysts rate it a sell, and 13 rate it a hold.

The average volume for Quest Diagnostics has been 1.2 million shares per day over the past 30 days. Quest has a market cap of $9.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.36 and a short float of 13.3% with 7.47 days to cover. Shares are up 14.6% year-to-date as of the close of trading on Tuesday.

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

Highlights from the ratings report include:
  • DGX's revenue growth trails the industry average of 19.5%. Since the same quarter one year prior, revenues slightly increased by 6.5%. 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 $271.00 million or 45.44% when compared to the same quarter last year. In addition, QUEST DIAGNOSTICS INC has also vastly surpassed the industry average cash flow growth rate of -26.60%.
  • 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.
  • 41.75% is the gross profit margin for QUEST DIAGNOSTICS INC which we consider to be strong. Regardless of DGX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DGX's net profit margin of 6.77% compares favorably to the industry average.
  • DGX's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.94 is weak.

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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