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 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 $43.8 million.
  • ATML has traded 554,257 shares today.
  • ATML traded in a range 236% of the normal price range with a price range of $0.59.
  • ATML traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 products primarily in the United States, Asia, Europe, South Africa, and Central and South America. The stock currently has a dividend yield of 0.5%. ATML has a PE ratio of 107.2. 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 4.2 million shares per day over the past 30 days. Atmel has a market cap of $3.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.23 and a short float of 2.9% with 2.09 days to cover. Shares are up 2.8% year-to-date as of the close of trading on Wednesday.

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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 largely solid financial position with reasonable debt levels by most measures, 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, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • ATML's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.50, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for ATMEL CORP is rather high; currently it is at 52.19%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.86% is in-line with the industry average.
  • 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).
  • 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.
  • Net operating cash flow has decreased to $37.17 million or 23.20% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ATMEL CORP has marginally lower results.

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