Today's Unusual Social Activity Stock: Valeant Pharmaceuticals International (VRX)

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

  • VRX has 11x the normal benchmarked social activity for this time of the day compared to its average of 6.63 mentions/day.
  • VRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $307.5 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 VRX:

Valeant Pharmaceuticals International, Inc. develops, manufactures, and markets pharmaceuticals, over-the-counter (OTC) products, and medical devices in the areas of eye health, dermatology, and neurology therapeutic classes worldwide. VRX has a PE ratio of 85.7. Currently there are 9 analysts that rate Valeant Pharmaceuticals International a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Valeant Pharmaceuticals International has been 2.5 million shares per day over the past 30 days. Valeant Pharmaceuticals International has a market cap of $44.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.58 and a short float of 4.1% with 4.91 days to cover. Shares are up 14.3% year-to-date as of the close of trading on Friday.

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 Valeant Pharmaceuticals International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 8.7%. Since the same quarter one year prior, revenues rose by 33.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 128.3% when compared to the same quarter one year prior, rising from -$973.24 million to $275.40 million.
  • Net operating cash flow has significantly increased by 206.72% to $618.70 million when compared to the same quarter last year. In addition, VALEANT PHARMACEUTICALS INTL has also vastly surpassed the industry average cash flow growth rate of -19.99%.
  • The gross profit margin for VALEANT PHARMACEUTICALS INTL is currently very high, coming in at 75.57%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.39% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that 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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