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

  • AIRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.9 million.
  • AIRM has traded 297,223 shares today.
  • AIRM is trading at 39.94 times the normal volume for the stock at this time of day.
  • AIRM is trading at a new high 18.04% 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.

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More details on AIRM:

Air Methods Corporation, together with its subsidiaries, provides air medical emergency transport services and systems in the United States. The company operates in the Air Medical Services (AMS), Tourism, and United Rotorcraft (UR) segments. AIRM has a PE ratio of 20.3. Currently there are 4 analysts that rate Air Methods a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Air Methods has been 346,600 shares per day over the past 30 days. Air Methods has a market cap of $1.8 billion and is part of the services sector and transportation industry. The stock has a beta of 0.83 and a short float of 27.8% with 31.79 days to cover. Shares are up 3.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Air Methods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. 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 18.7%. Since the same quarter one year prior, revenues rose by 10.1%. 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.
  • 41.94% is the gross profit margin for AIR METHODS CORP which we consider to be strong. Regardless of AIRM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AIRM's net profit margin of 12.13% compares favorably to the industry average.
  • AIR METHODS CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, AIR METHODS CORP reported lower earnings of $1.54 versus $2.40 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $1.54).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, AIR METHODS CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, AIRM has underperformed the S&P 500 Index, declining 16.03% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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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