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

Inphi

(

IPHI

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

  • IPHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.2 million.
  • IPHI has traded 76,939 shares today.
  • IPHI is trading at 7.21 times the normal volume for the stock at this time of day.
  • IPHI is trading at a new high 6.06% 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 IPHI:

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. Its analog and mixed signal semiconductor solutions offer high signal integrity at data speeds while reducing system power consumption. Currently there are 7 analysts that rate Inphi a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Inphi has been 264,700 shares per day over the past 30 days. Inphi has a market cap of $575.4 million and is part of the technology sector and electronics industry. The stock has a beta of 1.52 and a short float of 3.1% with 5.06 days to cover. Shares are up 20.2% year-to-date as of the close of trading on Wednesday.

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 Inphi 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 36.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • IPHI 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 6.17, which clearly demonstrates the ability to cover short-term cash needs.
  • INPHI CORP 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. 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, INPHI CORP continued to lose money by earning -$0.45 versus -$0.73 in the prior year. This year, the market expects an improvement in earnings ($0.50 versus -$0.45).
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 148.4% when compared to the same quarter one year ago, falling from -$2.76 million to -$6.86 million.
  • Net operating cash flow has significantly decreased to $0.77 million or 80.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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