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 Penn National Gaming ( PENN) 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 Penn National Gaming as such a stock due to the following factors:
- PENN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $64.3 million.
- PENN has traded 1.1 million shares today.
- PENN traded in a range 233.5% of the normal price range with a price range of $2.29.
- PENN traded above its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in PENN with the Ticky from Trade-Ideas. See the FREE profile for PENN NOW at Trade-Ideas More details on PENN: Penn National Gaming, Inc., together with its subsidiaries, owns and manages gaming and pari-mutuel properties in the United States and Canada. It engages in gaming on slot machines and table games. The stock currently has a dividend yield of 1%. PENN has a PE ratio of 47.1. Currently there are 9 analysts that rate Penn National Gaming a buy, no analysts rate it a sell, and 6 rate it a hold. The average volume for Penn National Gaming has been 857,800 shares per day over the past 30 days. Penn National Gaming has a market cap of $4.4 billion and is part of the services sector and leisure industry. The stock has a beta of 0.60 and a short float of 14.2% with 8.35 days to cover. Shares are up 13.3% year to date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Penn National Gaming as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share. Highlights from the ratings report include:
- PENN's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $157.64 million or 45.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.14%.
- 43.42% is the gross profit margin for PENN NATIONAL GAMING INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.59% is in-line with the industry average.
- Compared to its closing price of one year ago, PENN's share price has jumped by 33.34%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- PENN NATIONAL GAMING INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PENN NATIONAL GAMING INC reported lower earnings of $2.00 versus $2.26 in the prior year. For the next year, the market is expecting a contraction of 30.5% in earnings ($1.39 versus $2.00).
- You can view the full Penn National Gaming Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.