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 Amphenol ( APH) 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 Amphenol as such a stock due to the following factors:

  • APH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.6 million.
  • APH has traded 391,039 shares today.
  • APH traded in a range 200% of the normal price range with a price range of $1.50.
  • APH traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 APH:

Amphenol Corporation, together with its subsidiaries, primarily designs, manufactures, and markets electrical, electronic, and fiber optic connectors worldwide. It operates through two segments, Interconnect Products and Assemblies, and Cable Products and Solutions. The stock currently has a dividend yield of 0.9%. APH has a PE ratio of 25. Currently there are 3 analysts that rate Amphenol a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Amphenol has been 872,100 shares per day over the past 30 days. Amphenol has a market cap of $17.4 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.61 and a short float of 2.1% with 6.65 days to cover. Shares are up 3.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Amphenol as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, notable return on equity, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • APH's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AMPHENOL CORP has improved earnings per share by 16.3% 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, AMPHENOL CORP increased its bottom line by earning $2.22 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus $2.22).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, AMPHENOL CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 35.02% is the gross profit margin for AMPHENOL CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.54% is above that of the industry average.
  • APH's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.64 is very high and demonstrates very strong liquidity.

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