Heavy Trading On Methode Electronics (MEI) Before Market Open

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 Methode Electronics ( MEI) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Methode Electronics as such a stock due to the following factors:

  • MEI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.3 million.
  • MEI traded 72,720 shares today in the pre-market hours as of 8:36 AM, representing 11.4% of its average daily volume.

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More details on MEI:

Methode Electronics, Inc. designs, manufactures, and markets components and subsystem devices worldwide. Its Automotive segment supplies electronic and electromechanical devices, and related products to automobile original equipment manufacturers. The stock currently has a dividend yield of 0.8%. MEI has a PE ratio of 14. Currently there are 2 analysts that rate Methode Electronics a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Methode Electronics has been 357,300 shares per day over the past 30 days. Methode has a market cap of $1.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.06 and a short float of 1.8% with 1.54 days to cover. Shares are up 18.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Methode Electronics 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, notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • MEI's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MEI's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.50, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, METHODE ELECTRONICS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 78.94% and other important driving factors, this stock has surged by 31.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MEI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • METHODE ELECTRONICS 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, METHODE ELECTRONICS INC increased its bottom line by earning $2.50 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $2.50).

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