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

  • DHR has 10x the normal benchmarked social activity for this time of the day compared to its average of 2.90 mentions/day.
  • DHR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $235.4 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 DHR:

Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The stock currently has a dividend yield of 0.6%. DHR has a PE ratio of 23.3. Currently there are 12 analysts that rate Danaher a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Danaher has been 2.7 million shares per day over the past 30 days. Danaher has a market cap of $59.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.01 and a short float of 1.4% with 3.17 days to cover. Shares are down 2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Danaher 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, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 4.5%. 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.
  • DHR's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for DANAHER CORP is rather high; currently it is at 58.43%. It has increased from the same quarter the previous year.
  • Net operating cash flow has slightly increased to $523.60 million or 2.42% when compared to the same quarter last year. Despite an increase in cash flow, DANAHER CORP's average is still marginally south of the industry average growth rate of 8.12%.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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