Trade-Ideas: Endo International (ENDP) 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.

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

  • ENDP has 13x the normal benchmarked social activity for this time of the day compared to its average of 4.68 mentions/day.
  • ENDP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $167.4 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 ENDP:

Endo International plc, a specialty healthcare company, focuses on branded and generic pharmaceuticals and devices worldwide. It operates through four segments: U.S. Branded Pharmaceuticals, U.S. Generic Pharmaceuticals, Devices, and International Pharmaceuticals. The U.S. Currently there are 11 analysts that rate Endo International a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Endo International has been 2.3 million shares per day over the past 30 days. Endo International has a market cap of $15.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.21 and a short float of 6.7% with 6.23 days to cover. Shares are up 19.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Endo International as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 36.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 93.62% and other important driving factors, this stock has surged by 28.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • ENDO INTERNATIONAL PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENDO INTERNATIONAL PLC reported poor results of -$5.28 versus -$4.67 in the prior year. This year, the market expects an improvement in earnings ($4.45 versus -$5.28).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, ENDO INTERNATIONAL PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.86 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, ENDP maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.

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