Trade-Ideas LLC identified

Mentor Graphics

(

MENT

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

  • MENT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.9 million.
  • MENT has traded 911,323 shares today.
  • MENT is trading at 8.45 times the normal volume for the stock at this time of day.
  • MENT is trading at a new high 3.02% 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 MENT:

Mentor Graphics Corporation provides electronic design automation software and hardware solutions to automate the design, analysis, and testing of electro-mechanical systems, electronic hardware, and embedded systems software. The stock currently has a dividend yield of 0.8%. MENT has a PE ratio of 22. Currently there are 4 analysts that rate Mentor Graphics a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Mentor Graphics has been 733,900 shares per day over the past 30 days. Mentor Graphics has a market cap of $3.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.70 and a short float of 8.5% with 3.31 days to cover. Shares are down 18.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mentor Graphics as a

buy

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

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, MENT's share price has jumped by 29.32%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MENT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MENT's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has increased to $25.04 million or 35.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.89%.
  • Despite the weak revenue results, MENT has outperformed against the industry average of 15.7%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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