Trade-Ideas: Pinnacle Entertainment (PNK) Is Today's Strong And Under The Radar 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 or Stephanie Link.
Trade-Ideas LLC identified
(
) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Pinnacle Entertainment as such a stock due to the following factors:
- PNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.8 million.
- PNK is making at least a new 3-day high.
- PNK has a PE ratio of 41.9.
- PNK is mentioned 1.35 times per day on StockTwits.
- PNK has not yet been mentioned on StockTwits today.
- PNK is currently in the upper 20% of its 1-year range.
- PNK is in the upper 35% of its 20-day range.
- PNK is in the upper 45% of its 5-day range.
- PNK is currently trading above yesterday's high.
'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.
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More details on PNK:
Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. Its Midwest segment operates Ameristar Council Bluffs, Ameristar East Chicago, Ameristar Kansas City, Ameristar St. PNK has a PE ratio of 41.9. Currently there are 3 analysts that rate Pinnacle Entertainment a buy, 2 analysts rate it a sell, and 6 rate it a hold.
The average volume for Pinnacle Entertainment has been 890,300 shares per day over the past 30 days. Pinnacle Entertainment has a market cap of $1.6 billion and is part of the services sector and leisure industry. The stock has a beta of 1.47 and a short float of 18.7% with 14.56 days to cover. Shares are up 15.7% year-to-date as of the close of trading on Friday.
Analysis:
rates Pinnacle Entertainment as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and unimpressive growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PINNACLE ENTERTAINMENT 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. This trend suggests that the performance of the business is improving. During the past fiscal year, PINNACLE ENTERTAINMENT INC turned its bottom line around by earning $0.63 versus -$2.28 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $0.63).
- 43.88% is the gross profit margin for PINNACLE ENTERTAINMENT INC which we consider to be strong. Regardless of PNK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PNK's net profit margin of 2.62% is significantly lower than the industry average.
- The change in net income from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income has decreased by 3.1% when compared to the same quarter one year ago, dropping from $15.01 million to $14.55 million.
- The debt-to-equity ratio is very high at 13.78 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full Pinnacle Entertainment Ratings Report.
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