Today's Unusual Social Activity Stock: Allstate (ALL)

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.

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

  • ALL has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 2.71 mentions/day.
  • ALL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $163.2 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 ALL:

The Allstate Corporation, through its subsidiaries, engages in the property-liability insurance and life insurance businesses in the United States and Canada. The stock currently has a dividend yield of 1.7%. ALL has a PE ratio of 11.1. Currently there are 8 analysts that rate Allstate a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Allstate has been 2.3 million shares per day over the past 30 days. Allstate has a market cap of $28.5 billion and is part of the financial sector and insurance industry. The stock has a beta of 0.82 and a short float of 2.3% with 3.51 days to cover. Shares are down 0.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Allstate as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • ALL's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although ALL's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Insurance industry average. The net income increased by 0.4% when compared to the same quarter one year prior, going from $821.00 million to $824.00 million.
  • 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 Insurance industry and the overall market on the basis of return on equity, ALLSTATE CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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