Don't Miss Today's Strong And Under The Radar Stock: Pinnacle Entertainment (PNK)

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.

Trade-Ideas LLC identified Pinnacle Entertainment ( PNK) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Pinnacle Entertainment as such a stock due to the following factors:

  • PNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.6 million.
  • PNK is making at least a new 3-day high.
  • PNK has a PE ratio of 49.
  • PNK is mentioned 1.77 times per day on StockTwits.
  • PNK has not yet been mentioned on StockTwits today.
  • PNK is currently in the upper 20% of its 1-year range.
  • PNK is in the upper 35% of its 20-day range.
  • PNK is in the upper 45% of its 5-day range.
  • PNK 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 PNK:

Pinnacle Entertainment, Inc. owns, develops, and operates casinos and related hospitality and entertainment facilities in the United States. Its Midwest segment operates Ameristar Council Bluffs, Ameristar East Chicago, Ameristar Kansas City, Ameristar St. PNK has a PE ratio of 49. Currently there are 3 analysts that rate Pinnacle Entertainment a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Pinnacle Entertainment has been 1.1 million shares per day over the past 30 days. Pinnacle Entertainment has a market cap of $2.2 billion and is part of the services sector and leisure industry. The stock has a beta of 0.85 and a short float of 5.9% with 6.49 days to cover. Shares are up 65.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pinnacle Entertainment as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 7.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PINNACLE ENTERTAINMENT INC has improved earnings per share by 41.9% 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, PINNACLE ENTERTAINMENT INC turned its bottom line around by earning $0.63 versus -$2.28 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.63).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, PINNACLE ENTERTAINMENT INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Powered by its strong earnings growth of 41.93% and other important driving factors, this stock has surged by 48.50% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The debt-to-equity ratio is very high at 12.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, PNK has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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