Don't Miss Today's Strong And Under The Radar Stock: Multimedia Games (MGAM)

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 Multimedia Games ( MGAM) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Multimedia Games as such a stock due to the following factors:

  • MGAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.7 million.
  • MGAM is making at least a new 3-day high.
  • MGAM has a PE ratio of 35.2.
  • MGAM is mentioned 0.68 times per day on StockTwits.
  • MGAM has not yet been mentioned on StockTwits today.
  • MGAM is currently in the upper 20% of its 1-year range.
  • MGAM is in the upper 35% of its 20-day range.
  • MGAM is in the upper 45% of its 5-day range.
  • MGAM is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on MGAM:

Multimedia Games Holding Company, Inc. designs, manufactures, and supplies gaming machines and systems to casino, lottery, and commercial bingo gaming facility operators in the United States and internationally. MGAM has a PE ratio of 35.2. Currently there are no analysts that rate Multimedia Games a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Multimedia Games has been 460,800 shares per day over the past 30 days. Multimedia Games has a market cap of $1.1 billion and is part of the services sector and leisure industry. The stock has a beta of 0.63 and a short float of 2.6% with 1.15 days to cover. Shares are up 14.1% 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 Multimedia Games as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • MGAM's revenue growth has slightly outpaced the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 0.3%. 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.
  • MGAM's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.46, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $24.09 million or 48.05% when compared to the same quarter last year. In addition, MULTIMEDIA GAMES HOLDING CO has also vastly surpassed the industry average cash flow growth rate of -17.67%.
  • The gross profit margin for MULTIMEDIA GAMES HOLDING CO is currently very high, coming in at 82.06%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.49% trails the industry average.
  • MULTIMEDIA GAMES HOLDING CO 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, MULTIMEDIA GAMES HOLDING CO reported lower earnings of $1.03 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $1.03).

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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