Trade-Ideas LLC identified Scientific Games ( SGMS) as a "dead cat bounce" (down big yesterday but up big today) 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 $15.5 million.
  • SGMS has traded 50,822 shares today.
  • SGMS is up 3.9% today.
  • SGMS was down 14.1% yesterday.

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More details on SGMS:

Scientific Games Corporation develops technology-based products and services, and associated content for the gaming, lottery, and interactive gaming industries worldwide. Currently there are 3 analysts that rate Scientific Games a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Scientific Games has been 752,900 shares per day over the past 30 days. Scientific Games has a market cap of $943.5 million and is part of the services sector and leisure industry. The stock has a beta of 2.66 and a short float of 22.2% with 6.63 days to cover. Shares are up 18.8% year-to-date as of the close of trading on Friday.

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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 deteriorating net income, 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 underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income has decreased by 6.8% when compared to the same quarter one year ago, dropping from -$86.40 million to -$92.30 million.
  • Looking at the price performance of SGMS's shares over the past 12 months, there is not much good news to report: the stock is down 26.34%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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's earnings per share declined by 5.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SCIENTIFIC GAMES CORP reported poor results of -$16.23 versus -$2.76 in the prior year. This year, the market expects an improvement in earnings (-$3.04 versus -$16.23).
  • The gross profit margin for SCIENTIFIC GAMES CORP is rather high; currently it is at 62.42%. Regardless of SGMS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SGMS's net profit margin of -13.53% significantly underperformed when compared to the industry average.
  • Net operating cash flow has increased to $101.10 million or 29.94% when compared to the same quarter last year. In addition, SCIENTIFIC GAMES CORP has also vastly surpassed the industry average cash flow growth rate of -79.94%.

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