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

SolarWinds

(

SWI

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

  • SWI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.9 million.
  • SWI has traded 207,872 shares today.
  • SWI is trading at 3.71 times the normal volume for the stock at this time of day.
  • SWI is trading at a new high 3.04% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SWI with the Ticky from Trade-Ideas. See the FREE profile for SWI NOW at Trade-Ideas

More details on SWI:

SolarWinds, Inc., together with its subsidiaries, designs, develops, markets, sells, and supports enterprise-class information technology (IT) and infrastructure management software to IT and DevOps professionals in various organizations worldwide. SWI has a PE ratio of 46. Currently there are 6 analysts that rate SolarWinds a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for SolarWinds has been 538,900 shares per day over the past 30 days. SolarWinds has a market cap of $3.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.56 and a short float of 1.4% with 0.85 days to cover. Shares are down 28.7% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SolarWinds as a

buy

. 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, solid stock price performance, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SWI 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 65.5% when compared to the same quarter one year prior, rising from $13.38 million to $22.15 million.
  • Net operating cash flow has slightly increased to $54.71 million or 7.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.00%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.