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

  • TER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.9 million.
  • TER has traded 241,434 shares today.
  • TER is trading at 6.06 times the normal volume for the stock at this time of day.
  • TER is trading at a new low 3.10% 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 TER:

Teradyne, Inc. provides automatic test equipment worldwide. The stock currently has a dividend yield of 1.3%. TER has a PE ratio of 51.0. Currently there are 6 analysts that rate Teradyne a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Teradyne has been 1.6 million shares per day over the past 30 days. Teradyne has a market cap of $4.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.01 and a short float of 2.7% with 3.85 days to cover. Shares are down 5.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Teradyne 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 and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • TER's revenue growth has slightly outpaced the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 13.3%. 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.
  • TER 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. Along with this, the company maintains a quick ratio of 3.35, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 299.02% to $174.96 million when compared to the same quarter last year. In addition, TERADYNE INC has also vastly surpassed the industry average cash flow growth rate of 7.49%.
  • The gross profit margin for TERADYNE INC is rather high; currently it is at 55.93%. Regardless of TER's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TER's net profit margin of -32.11% significantly underperformed when compared to the industry average.
  • TERADYNE INC 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TERADYNE INC reported lower earnings of $0.37 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.37).

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