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

Ingram Micro

(

IM

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ingram Micro as such a stock due to the following factors:

  • IM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.7 million.
  • IM has traded 264,269 shares today.
  • IM is down 3.1% today.
  • IM was up 11.1% yesterday.

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More details on IM:

Ingram Micro Inc. distributes information technology (IT) products; and provides supply chain and mobile device lifecycle services worldwide. IM has a PE ratio of 14. Currently there are 6 analysts that rate Ingram Micro a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Ingram Micro has been 926,300 shares per day over the past 30 days. Ingram Micro has a market cap of $3.8 billion and is part of the services sector and wholesale industry. The stock has a beta of 1.22 and a short float of 2.5% with 2.53 days to cover. Shares are down 1.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ingram Micro as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 2296.77% to $567.95 million when compared to the same quarter last year. In addition, INGRAM MICRO INC has also vastly surpassed the industry average cash flow growth rate of 9.26%.
  • IM's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • INGRAM MICRO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, INGRAM MICRO INC reported lower earnings of $1.67 versus $1.98 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $1.67).
  • IM, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for INGRAM MICRO INC is currently extremely low, coming in at 6.43%. Regardless of IM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.32% trails the industry average.

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