Trade-Ideas: International Game Technology (IGT) Is Today's "Water-Logged And Getting Wetter" Stock
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
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified International Game Technology as such a stock due to the following factors:
- IGT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.9 million.
- IGT has traded 4.8 million shares today.
- IGT traded in a range 200.6% of the normal price range with a price range of $0.23.
- IGT traded below its daily resistance level (quality: 38 days, meaning that the stock is crossing a resistance level set by the last 38 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in IGT with the Ticky from Trade-Ideas. See the FREE profile for IGT NOW at Trade-Ideas
More details on IGT:
International Game Technology, a gaming company, designs, develops, manufactures, and markets casino-style gaming equipment, systems technology, and game content for land-based and online markets worldwide. The company operates in two segments, North America and International. The stock currently has a dividend yield of 2.5%. IGT has a PE ratio of 21.7. Currently there are no analysts that rate International Game Technology a buy, 1 analyst rates it a sell, and 10 rate it a hold.
The average volume for International Game Technology has been 2.2 million shares per day over the past 30 days. International Game Technology has a market cap of $4.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.43 and a short float of 1% with 0.88 days to cover. Shares are up 2.8% year-to-date as of the close of trading on Monday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates International Game Technology as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- Compared to its closing price of one year ago, IGT's share price has jumped by 30.24%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has increased to $102.90 million or 35.21% when compared to the same quarter last year. Despite an increase in cash flow, INTL GAME TECHNOLOGY's average is still marginally south of the industry average growth rate of 37.57%.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, INTL GAME TECHNOLOGY has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 55.8% when compared to the same quarter one year ago, falling from $79.20 million to $35.00 million.
- You can view the full International Game Technology Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
null