Atmel (ATML) Weak On High Volume - TheStreet

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

Atmel

(

ATML

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

  • ATML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.9 million.
  • ATML has traded 1.3 million shares today.
  • ATML is trading at 7.59 times the normal volume for the stock at this time of day.
  • ATML is trading at a new low 6.09% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 ATML:

Atmel Corporation designs, develops, manufactures, and sells semiconductor integrated circuit (IC) products. ATML has a PE ratio of 91.6. Currently there are 7 analysts that rate Atmel a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Atmel has been 5.3 million shares per day over the past 30 days. Atmel has a market cap of $3.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 2.20 and a short float of 3.1% with 2.45 days to cover. Shares are down 7.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Atmel as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.

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 Semiconductors & Semiconductor Equipment industry. The net income increased by 48.2% when compared to the same quarter one year prior, rising from $12.98 million to $19.24 million.
  • ATML's revenue growth trails the industry average of 17.7%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ATMEL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ATMEL CORP swung to a loss, reporting -$0.05 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus -$0.05).
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, ATMEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, ATML 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.

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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