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

National Instruments

(

NATI

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

  • NATI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.6 million.
  • NATI has traded 109,850 shares today.
  • NATI is trading at 10.90 times the normal volume for the stock at this time of day.
  • NATI is trading at a new high 3.10% 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 NATI:

National Instruments Corporation designs, manufactures, and sells systems to engineers and scientists worldwide. The stock currently has a dividend yield of 2.8%. NATI has a PE ratio of 29. Currently there is 1 analyst that rates National Instruments a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for National Instruments has been 415,900 shares per day over the past 30 days. National Instruments has a market cap of $3.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.11 and a short float of 2.1% with 5.89 days to cover. Shares are down 10.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates National Instruments as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • NATI's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 1.7%. 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.
  • NATI 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 2.70, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for NATIONAL INSTRUMENTS CORP is currently very high, coming in at 79.70%. Regardless of NATI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.18% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, NATIONAL INSTRUMENTS CORP's return on equity is below that of both the industry average and the S&P 500.
  • NATIONAL INSTRUMENTS CORP's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NATIONAL INSTRUMENTS CORP increased its bottom line by earning $0.99 versus $0.65 in the prior year. For the next year, the market is expecting a contraction of 13.1% in earnings ($0.86 versus $0.99).

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