Trade-Ideas: Bally Technologies (BYI) Is Today's

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 Bally Technologies ( BYI) 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 Bally Technologies as such a stock due to the following factors:

  • BYI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.3 million.
  • BYI has traded 175,081 shares today.
  • BYI traded in a range 206% of the normal price range with a price range of $3.30.
  • BYI traded below its daily resistance level (quality: 60 days, meaning that the stock is crossing a resistance level set by the last 60 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.

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More details on BYI:

Bally Technologies, Inc., a gaming company, designs, manufactures, operates, and distributes advanced technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications in the United States and internationally. BYI has a PE ratio of 22.0. Currently there are 9 analysts that rate Bally Technologies a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Bally Technologies has been 391,300 shares per day over the past 30 days. Bally has a market cap of $3.1 billion and is part of the services sector and leisure industry. The stock has a beta of 1.88 and a short float of 12.7% with 8.14 days to cover. Shares are down 3.5% 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 Bally Technologies as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • BYI's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 25.97% and other important driving factors, this stock has surged by 71.59% 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, BYI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • BALLY TECHNOLOGIES INC has improved earnings per share by 26.0% 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, BALLY TECHNOLOGIES INC increased its bottom line by earning $3.45 versus $2.27 in the prior year. This year, the market expects an improvement in earnings ($4.22 versus $3.45).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income increased by 16.1% when compared to the same quarter one year prior, going from $32.53 million to $37.78 million.
  • Net operating cash flow has increased to $54.58 million or 44.68% when compared to the same quarter last year. In addition, BALLY TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -68.21%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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