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 Atmel ( ATML) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Atmel as such a stock due to the following factors:

  • ATML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.6 million.
  • ATML has traded 2.8 million shares today.
  • ATML traded in a range 200.9% of the normal price range with a price range of $0.35.
  • ATML traded above its daily resistance level (quality: 163 days, meaning that the stock is crossing a resistance level set by the last 163 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on ATML:

Atmel Corporation designs, develops, manufactures, and sells semiconductor integrated circuit (IC) products. The stock currently has a dividend yield of 0.5%. ATML has a PE ratio of 105.5. Currently there are 9 analysts that rate Atmel a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Atmel has been 4.0 million shares per day over the past 30 days. Atmel has a market cap of $3.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.32 and a short float of 2.7% with 2.98 days to cover. Shares are down 0.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Atmel as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • ATMEL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ATMEL CORP turned its bottom line around by earning $0.08 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus $0.08).
  • ATML, with its decline in revenue, underperformed when compared the industry average of 10.7%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, ATML has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 189.6% when compared to the same quarter one year ago, falling from $7.21 million to -$6.46 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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