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

  • JCI has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 5.10 mentions/day.
  • JCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $201.4 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 JCI:

Johnson Controls, Inc. operates as a diversified technology and industrial company worldwide. The stock currently has a dividend yield of 2%. JCI has a PE ratio of 23. Currently there are 9 analysts that rate Johnson Controls a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Johnson Controls has been 3.3 million shares per day over the past 30 days. Johnson Controls has a market cap of $34.2 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.68 and a short float of 0.9% with 1.54 days to cover. Shares are up 6.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • JOHNSON CONTROLS INC has improved earnings per share by 11.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, JOHNSON CONTROLS INC increased its bottom line by earning $2.05 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $2.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 102.7% when compared to the same quarter one year prior, rising from $261.00 million to $529.00 million.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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