Unusual Social Activity Around Deere (DE) Today

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

  • DE has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 3.65 mentions/day.
  • DE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $183.0 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 DE:

Deere & Company, together with its subsidiaries, manufactures and distributes agriculture and turf, and construction and forestry equipment worldwide. The stock currently has a dividend yield of 2.6%. DE has a PE ratio of 11. Currently there are 3 analysts that rate Deere a buy, 6 analysts rate it a sell, and 7 rate it a hold.

The average volume for Deere has been 2.6 million shares per day over the past 30 days. Deere has a market cap of $30.8 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.00 and a short float of 8.8% with 14.91 days to cover. Shares are up 2.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Deere as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has increased to -$510.10 million or 31.64% when compared to the same quarter last year. In addition, DEERE & CO has also vastly surpassed the industry average cash flow growth rate of -32.24%.
  • DE, with its decline in revenue, slightly underperformed the industry average of 10.5%. Since the same quarter one year prior, revenues fell by 16.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Machinery industry and the overall market, DEERE & CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The share price of DEERE & CO has not done very well: it is down 5.19% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • DEERE & CO's earnings per share declined by 38.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, DEERE & CO reported lower earnings of $8.62 versus $9.08 in the prior year. For the next year, the market is expecting a contraction of 37.9% in earnings ($5.35 versus $8.62).

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