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

Crocs

(

CROX

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

  • CROX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.8 million.
  • CROX has traded 509,285 shares today.
  • CROX is trading at 10.64 times the normal volume for the stock at this time of day.
  • CROX is trading at a new high 3.08% 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 CROX:

Crocs, Inc. designs, develops, manufactures, markets, and distributes casual lifestyle footwear, apparel, and accessories for men, women, and children worldwide. The company designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin, called Croslite. Currently there are 3 analysts that rate Crocs a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Crocs has been 1.4 million shares per day over the past 30 days. Crocs has a market cap of $1.1 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.87 and a short float of 15.8% with 11.22 days to cover. Shares are up 13.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Crocs as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • CROX's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CROX has a quick ratio of 1.96, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to -$46.71 million or 25.54% when compared to the same quarter last year. In addition, CROCS INC has also vastly surpassed the industry average cash flow growth rate of -106.08%.
  • 49.34% is the gross profit margin for CROCS INC which we consider to be strong. Regardless of CROX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CROX's net profit margin of -0.92% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 126.6% when compared to the same quarter one year ago, falling from $9.12 million to -$2.43 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, CROCS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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