Scientific Games (SGMS) Is Today's Pre-Market Mover With Heavy Volume 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 Scientific Games ( SGMS) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Scientific Games as such a stock due to the following factors:

  • SGMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.7 million.
  • SGMS traded 183,468 shares today in the pre-market hours as of 8:18 AM, representing 25.4% of its average daily volume.

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More details on SGMS:

Scientific Games Corporation provides technology-based products and services, and associated content for gaming and lottery markets worldwide. The company operates in three segments: Instant Products, Lottery Systems, and Gaming. Currently there are 5 analysts that rate Scientific Games a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Scientific Games has been 1.2 million shares per day over the past 30 days. Scientific Games has a market cap of $758.5 million and is part of the services sector and leisure industry. The stock has a beta of 1.89 and a short float of 10.3% with 8.40 days to cover. Shares are down 47.8% year-to-date as of the close of trading on Wednesday.

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 Scientific Games as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 242.1% when compared to the same quarter one year ago, falling from -$13.15 million to -$45.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, SCIENTIFIC GAMES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 11.20 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, SGMS's quick ratio is somewhat strong at 1.45, demonstrating the ability to handle short-term liquidity needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.02%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 253.33% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • SCIENTIFIC GAMES CORP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SCIENTIFIC GAMES CORP continued to lose money by earning -$0.31 versus -$0.50 in the prior year. For the next year, the market is expecting a contraction of 274.2% in earnings (-$1.16 versus -$0.31).

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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