Bally Technologies (BYI) Is Water-Logged And Getting Wetter Today

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 $50.5 million.
  • BYI has traded 514,612 shares today.
  • BYI traded in a range 246.1% of the normal price range with a price range of $3.24.
  • BYI traded below its daily resistance level (quality: 69 days, meaning that the stock is crossing a resistance level set by the last 69 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 electronic gaming machines (EGM), network and casino-management systems, table game products, and interactive applications in the United States, Canada, and internationally. BYI has a PE ratio of 30.9. Currently there are 3 analysts that rate Bally Technologies a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Bally Technologies has been 1.0 million shares per day over the past 30 days. Bally has a market cap of $3.0 billion and is part of the services sector and leisure industry. The stock has a beta of 1.95 and a short float of 11.4% with 3.04 days to cover. Shares are up 1.5% 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 robust revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 29.4%. 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 slightly increased to $72.39 million or 9.82% 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 -67.46%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • BALLY TECHNOLOGIES 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. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BALLY TECHNOLOGIES INC reported lower earnings of $2.52 versus $3.45 in the prior year. This year, the market expects an improvement in earnings ($4.93 versus $2.52).

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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