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 International Game Technology ( IGT) 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 $53.6 million.
- IGT has traded 5.9 million shares today.
- IGT traded in a range 212.3% of the normal price range with a price range of $0.75.
- IGT traded below its daily resistance level (quality: 453 days, meaning that the stock is crossing a resistance level set by the last 453 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 stock currently has a dividend yield of 2.9%. IGT has a PE ratio of 13.8. Currently there are 3 analysts that rate International Game Technology a buy, 1 analyst rates it a sell, and 13 rate it a hold. The average volume for International Game Technology has been 5.2 million shares per day over the past 30 days. International Game Technology has a market cap of $3.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.46 and a short float of 7.6% with 4.78 days to cover. Shares are down 18.2% year-to-date as of the close of trading on Tuesday. 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 International Game Technology as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- IGT's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- INTL GAME TECHNOLOGY has improved earnings per share by 29.2% 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, INTL GAME TECHNOLOGY increased its bottom line by earning $1.02 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $1.02).
- The gross profit margin for INTL GAME TECHNOLOGY is rather high; currently it is at 63.64%. Regardless of IGT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IGT's net profit margin of 14.63% compares favorably to the industry average.
- IGT has underperformed the S&P 500 Index, declining 12.53% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Currently the debt-to-equity ratio of 1.98 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, IGT maintains a poor quick ratio of 0.84, which illustrates the inability to avoid short-term cash problems.
- You can view the full International Game Technology 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.