International Game Technology (IGT) Caught in a Downwardly-Sloped Channel
Casino game manufacturer International Game Technology (NYSE: IGT) has been caught in a downwardly-sloped trend channel over the last six months. The stock has just cycled up to the upper rail of the channel. What remains to be seen is whether the stock can break out of the cycle.
You can see on the chart that the channel started at the beginning of May and the stock has lost half of its value from the high point to the low point. The upper rail of the cycle is in the same area as the 50-day moving average and that means the stock has two layers of resistance to break through.
Something else to take note of is how the daily stochastic readings have only reached overbought levels in two instances over the last six months. Both times were when the stock was at the top of the channel.
In addition to the technical pattern that has been guiding the stock lower, the fundamentals are pretty poor. The company has seen earnings decline by an average of 26% per year over the last three years. The most recent report shows that earnings declined by 23% on a year over year basis.
Sales have been growing slowly in recent years with the average annual rate being 2% in the last three years. The recent earnings report showed sales declined by 5% on a year over year basis.
Something that is surprising about IGT is that the sentiment toward the stock is still pretty bullish. The short interest ratio is at 3.64 which is somewhat of a neutral reading, but lower than I would expect it to be on a stock that has dropped the way it has. There are six analysts following the stock and four of the six have the stock rated as a “buy” and the other two have it rated as a “hold”.
IGT in upward trend: price may ascend as a result of having broken its lower Bollinger Band on April 12, 2024
IGT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 44 cases where IGT's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where IGT's RSI Oscillator 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 Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 59 cases where IGT's Stochastic Oscillator exited the oversold zone 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 .
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 98 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 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 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 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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General Information
a manufacturer of electronic gaming equipment, software and network systems
Industry CasinosGaming