3 Gaming Stocks Expected to Make Bullish Moves over the Next Month

Many gaming companies are struggling due to the restrictions on occupancy in public buildings. Large casinos have had to operate with considerably lower floor traffic than they are used to and would like. The earnings and revenue estimates for the industry have been ratcheted down as a result of the restrictions.

The stocks get hit hard during the first quarter of 2020, but most are trading back above the level they were at before the pandemic hit. Many stocks in the gaming industry have come under some selling pressure in recent weeks, but there were three that got high confidence level bullish signals on January 29. The signals call for gains of at least 4% over the next month.

The three companies are Caesars Entertainment (CZR), International Game Technology (IGT), and MGM Resorts International (MGM). The bullish signals for MGM and IGT both showed confidence levels of 89% and the one for Caesars showed a confidence level of 87%.

If you look at the fundamental analysis scores of the three stocks, you will see the struggles I mentioned earlier. IGT has two positive indicators and three negative indicators and that is the best of the three. MGM has one positive indicator and four negative ones. Caesars doesn’t have any positive indicators and it has three negative ones.

But these bullish signals are based more on the technical indicators than they are the fundamentals. We see that both IGT and Caesars have four bullish signals and three bearish signals. MGM has three bullish signals and four bearish signals.

On the fundamental side, the only area where there are multiple positive readings is the Valuation Ratings for MGM and IGT. The one area where there is consensus is that all three score poorly in the SMR Ratings.

On the technical side, there are several areas where we see consensus readings. All three stocks got bullish signals from their stochastic indicators on February 1. All three stocks have received bullish signals from the Bollinger Bands indicators within the last week, and all three have received bullish signals from the Aroon Indicator within the last few weeks.

All three companies will be reporting earnings in the next month or so and MGM and Caesars are both expected to post losses for the quarter. IGT is expected to report a small gain, but it is considerably lower than the company posted in Q4 2019. The EPS estimates for MGM and Caesars have been lowered over the last 90 days while IGT’s consensus estimate has remained constant.

Looking at the sentiment indicators for the three stocks, there were two that stood out. Analysts are extremely bearish toward MGM with only two “buy” ratings out of 19 total ratings. The other one was the short interest ratio on Caesars. The ratio is currently at 5.0 and that is higher than the average stock.

The complete analysis and comparison of the three stocks appears below.