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.
IGT sees its Stochastic Oscillator ascending out of oversold territory
On April 22, 2024, the Stochastic Oscillator for IGT moved out of oversold territory and this could be a bullish sign for the stock. Traders may want to buy the stock or buy call options. Tickeron's A.I.dvisor looked at 60 instances where the indicator left the oversold zone. In of the 60 cases the stock moved higher in the following days. This puts the odds of a move higher at over .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where IGT's RSI Indicator exited the oversold zone, of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for IGT just turned positive on April 19, 2024. Looking at past instances where IGT's MACD turned positive, the stock continued to rise in of 48 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where IGT advanced for three days, in of 316 cases, the price rose further within the following month. The odds of a continued upward trend are .
IGT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 10, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on IGT as a result. In of 99 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where IGT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for IGT entered a downward trend on April 18, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.056) is normal, around the industry mean (11.865). P/E Ratio (28.571) is within average values for comparable stocks, (62.563). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.549). Dividend Yield (0.036) settles around the average of (0.043) among similar stocks. P/S Ratio (1.036) is also within normal values, averaging (5.559).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock slightly better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. IGT’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a manufacturer of electronic gaming equipment, software and network systems
Industry CasinosGaming