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

FormFactor

(

FORM

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

  • FORM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.5 million.
  • FORM has traded 63,981 shares today.
  • FORM is trading at 2.17 times the normal volume for the stock at this time of day.
  • FORM is trading at a new low 4.06% 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 FORM:

FormFactor, Inc. designs, develops, manufactures, sells, and supports semiconductor probe card products and solutions worldwide. The company's probe cards are used to perform wafer test, which is the testing of the semiconductor die or chips on the semiconductor wafer. Currently there are 4 analysts that rate FormFactor a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for FormFactor has been 420,600 shares per day over the past 30 days. FormFactor has a market cap of $368.5 million and is part of the technology sector and electronics industry. The stock has a beta of 2.11 and a short float of 3.8% with 2.43 days to cover. Shares are down 12.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates FormFactor as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 26.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FORM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.41, which clearly demonstrates the ability to cover short-term cash needs.
  • 39.49% is the gross profit margin for FORMFACTOR INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FORM's net profit margin of 1.10% significantly trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, FORMFACTOR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • FORM has underperformed the S&P 500 Index, declining 7.65% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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