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

  • KRFT has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 1.26 mentions/day.
  • KRFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $177.9 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 KRFT:

Kraft Foods Group, Inc. operates as a consumer packaged food and beverage company in North America and worldwide. It operates through Beverages, Cheese, Refrigerated Meals, Meals & Desserts, Enhancers & Snack Nuts, Canada, and Other Businesses segments. The stock currently has a dividend yield of 3.8%. KRFT has a PE ratio of 14.9. Currently there are 4 analysts that rate Kraft Foods Group a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Kraft Foods Group has been 2.8 million shares per day over the past 30 days. Kraft Foods Group has a market cap of $34.6 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.17 and a short float of 1.5% with 2.99 days to cover. Shares are up 9.1% 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 Kraft Foods Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 0.1%. 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food Products industry and the overall market, KRAFT FOODS GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • KRAFT FOODS GROUP INC's earnings per share declined by 10.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KRAFT FOODS GROUP INC increased its bottom line by earning $4.51 versus $0.94 in the prior year. For the next year, the market is expecting a contraction of 30.5% in earnings ($3.14 versus $4.51).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Food Products industry average. The net income has decreased by 10.8% when compared to the same quarter one year ago, dropping from $500.00 million to $446.00 million.

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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