Unusual Social Activity Around Sysco (SYY) 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 Sysco ( SYY) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Sysco as such a stock due to the following factors:

  • SYY has 12x the normal benchmarked social activity for this time of the day compared to its average of 5.03 mentions/day
  • SYY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $208.7 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 SYY:

Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry. It operates in Broadline and SYGMA segments. The stock currently has a dividend yield of 3.1%. SYY has a PE ratio of 26. Currently there are two analysts that rate Sysco a buy, one analyst rates it a sell, and six rate it a hold.

The average volume for Sysco has been 3.7 million shares per day over the past 30 days. Sysco has a market cap of $22.74 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.81 and a short float of 4.2% with 3.75 days to cover. Shares are down 3.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sysco as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • SYY's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 4.2%. 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.
  • Net operating cash flow has slightly increased to $408.06 million or 4.65% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.48%.
  • SYSCO CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SYSCO CORP reported lower earnings of $1.58 versus $1.68 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $1.58).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income has decreased by 2.2% when compared to the same quarter one year ago, dropping from $180.94 million to $176.96 million.
  • In its most recent trading session, SYY has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.

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