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

  • MCRL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • MCRL has traded 60,800 shares today.
  • MCRL is trading at 3.06 times the normal volume for the stock at this time of day.
  • MCRL is trading at a new low 3.15% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 MCRL:

Micrel, Incorporated, together with its subsidiaries, designs, develops, manufactures, and markets analog, mixed-signal, and digital semiconductor devices. The stock currently has a dividend yield of 1.8%. MCRL has a PE ratio of 48.8. Currently there are 2 analysts that rate Micrel a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Micrel has been 485,700 shares per day over the past 30 days. Micrel has a market cap of $634.3 million and is part of the technology sector and electronics industry. The stock has a beta of 1.51 and a short float of 5.2% with 7.14 days to cover. Shares are up 15.8% 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 Micrel 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.
  • MCRL 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. To add to this, MCRL has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 551.18% to $13.18 million when compared to the same quarter last year. In addition, MICREL INC has also vastly surpassed the industry average cash flow growth rate of 7.58%.
  • The gross profit margin for MICREL INC is rather high; currently it is at 57.73%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MCRL's net profit margin of 5.66% significantly trails the industry average.
  • Compared to its closing price of one year ago, MCRL's share price has jumped by 28.52%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.