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 or Stephanie Link.

Trade-Ideas LLC identified

AOL

(

AOL

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified AOL as such a stock due to the following factors:

  • AOL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.4 million.
  • AOL has traded 114,098 shares today.
  • AOL is trading at 2.79 times the normal volume for the stock at this time of day.
  • AOL is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AOL:

AOL Inc. provides various digital brands, products and services to consumers, advertisers, publishers and subscribers worldwide. AOL has a PE ratio of 37.7. Currently there are 7 analysts that rate AOL a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for AOL has been 1.2 million shares per day over the past 30 days. AOL has a market cap of $3.6 billion and is part of the technology sector and internet industry. The stock has a beta of 0.20 and a short float of 8% with 2.91 days to cover. Shares are down 1.2% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AOL as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 1325.0% when compared to the same quarter one year prior, rising from $2.00 million to $28.50 million.
  • AOL's revenue growth trails the industry average of 27.8%. Since the same quarter one year prior, revenues rose by 11.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AOL's debt-to-equity ratio of 0.19 is very low, it is currently higher than that of the industry average. To add to this, AOL has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $137.80 million or 39.33% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 25.51%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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