United Technologies (UTX): Stock With Unusual Social Activity

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

  • UTX has 15x the normal benchmarked social activity for this time of the day compared to its average of 5.84 mentions/day.
  • UTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $334.2 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 UTX:

United Technologies Corporation provides technology products and services to building systems and aerospace industries worldwide. The stock currently has a dividend yield of 2.2%. UTX has a PE ratio of 17. Currently there are 11 analysts that rate United Technologies a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for United Technologies has been 3.3 million shares per day over the past 30 days. United has a market cap of $105.3 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.04 and a short float of 2% with 5.49 days to cover. Shares are up 2.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • UNITED TECHNOLOGIES CORP has improved earnings per share by 19.7% 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, UNITED TECHNOLOGIES CORP increased its bottom line by earning $6.82 versus $6.22 in the prior year. This year, the market expects an improvement in earnings ($7.00 versus $6.82).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Aerospace & Defense industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $1,213.00 million to $1,426.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that UTX's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, UNITED TECHNOLOGIES CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • UTX, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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