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

  • MMSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.1 million.
  • MMSI has traded 62,541 shares today.
  • MMSI is trading at 7.95 times the normal volume for the stock at this time of day.
  • MMSI is trading at a new high 3.26% 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 MMSI:

Merit Medical Systems, Inc. designs, develops, manufactures, and markets medical devices for interventional and diagnostic procedures worldwide. MMSI has a PE ratio of 36.3. Currently there are 3 analysts that rate Merit Medical Systems a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Merit Medical Systems has been 250,100 shares per day over the past 30 days. Merit Medical Systems has a market cap of $845.7 million and is part of the health care sector and health services industry. The stock has a beta of 1.81 and a short float of 3.4% with 3.27 days to cover. Shares are up 18.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Merit Medical Systems 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • MMSI's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 8.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 71.42% and other important driving factors, this stock has surged by 45.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • MERIT MEDICAL SYSTEMS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MERIT MEDICAL SYSTEMS INC increased its bottom line by earning $0.54 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.54).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Equipment & Supplies industry average. The net income increased by 83.3% when compared to the same quarter one year prior, rising from $2.82 million to $5.17 million.

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