Barbarian At The Gate: Wynn Resorts (WYNN)

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 Wynn Resorts ( WYNN) 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 Wynn Resorts as such a stock due to the following factors:

  • WYNN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $453.9 million.
  • WYNN has traded 2.1 million shares today.
  • WYNN traded in a range 212% of the normal price range with a price range of $11.73.
  • WYNN traded above its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 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.

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More details on WYNN:

Wynn Resorts, Limited, together with its subsidiaries, develops, owns, and operates destination casino resorts. It operates in two segments, Macau Operations and Las Vegas Operations. The company operates Wynn Macau and Encore at Wynn Macau resort located in the People's Republic of China. The stock currently has a dividend yield of 2.7%. WYNN has a PE ratio of 22.8. Currently there are 8 analysts that rate Wynn Resorts a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Wynn Resorts has been 1.7 million shares per day over the past 30 days. Wynn has a market cap of $18.7 billion and is part of the services sector and leisure industry. The stock has a beta of 1.66 and a short float of 4.7% with 1.93 days to cover. Shares are down 7.8% year-to-date as of the close of trading on Monday.

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 Wynn Resorts as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth, increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, WYNN RESORTS LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 5.8%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • WYNN RESORTS LTD 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. During the past fiscal year, WYNN RESORTS LTD increased its bottom line by earning $7.17 versus $4.81 in the prior year. This year, the market expects an improvement in earnings ($8.44 versus $7.17).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 57.1% when compared to the same quarter one year prior, rising from $129.79 million to $203.91 million.

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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