Staples (SPLS) Is Today's Unusual Social Activity Stock

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

  • SPLS has 16x the normal benchmarked social activity for this time of the day compared to its average of 9.19 mentions/day.
  • SPLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $182.8 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 SPLS:

Staples, Inc., together with its subsidiaries, operates office products superstores. It operates in three segments: North American Stores & Online, North American Commercial, and International Operations. The stock currently has a dividend yield of 3.8%. SPLS has a PE ratio of 13.7. Currently there are no analysts that rate Staples a buy, 2 analysts rate it a sell, and 12 rate it a hold.

The average volume for Staples has been 9.4 million shares per day over the past 30 days. Staples has a market cap of $8.2 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.82 and a short float of 11.7% with 5.74 days to cover. Shares are down 12.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Staples as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • SPLS's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that SPLS's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
  • SPLS, with its decline in revenue, slightly underperformed the industry average of 1.1%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for STAPLES INC is currently lower than what is desirable, coming in at 27.02%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.56% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$56.27 million or 1406725.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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