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

Clean Diesel Technologies

(

CDTI

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

  • CDTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.4 million.
  • CDTI has traded 3.3 million shares today.
  • CDTI is trading at 65.27 times the normal volume for the stock at this time of day.
  • CDTI is trading at a new high 14.20% 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 CDTI:

TheStreet Recommends

Clean Diesel Technologies, Inc. manufactures and distributes light duty vehicle catalysts and heavy duty diesel emissions control systems and products to automakers, integrators, and retrofitters in the United States, Canada, Sweden, and the United Kingdom. Currently there are 2 analysts that rate Clean Diesel Technologies a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Clean Diesel Technologies has been 880,500 shares per day over the past 30 days. Clean Diesel has a market cap of $38.7 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 2.88 and a short float of 4.8% with 0.09 days to cover. Shares are up 111.3% year-to-date as of the close of trading on Monday.

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 Clean Diesel Technologies as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.15 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, CDTI maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has significantly decreased to -$2.51 million or 328.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for CLEAN DIESEL TECHNOLOGIES is currently lower than what is desirable, coming in at 33.59%. Regardless of CDTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CDTI's net profit margin of -9.44% significantly underperformed when compared to the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, CLEAN DIESEL TECHNOLOGIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Auto Components industry average, but is greater than that of the S&P 500. The net income increased by 13.2% when compared to the same quarter one year prior, going from -$1.37 million to -$1.19 million.

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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