Tue, Mar 3, 2015, 8:24 AM EST - U.S. Markets open in 1 hr 6 mins

Recent

% | $
Quotes you view appear here for quick access.

International Game Technology Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • joetong419 joetong419 Nov 3, 2010 2:23 PM Flag

    possible catalysts for future growth?

    Bad link - here's the copy and paste from Barron's. Or read the IGT headlines.

    OPTIONS TRADING SOMETIMES is derided as nothing more than gambling. But a wager against slot-machine maker International Game Technology (ticker: IGT) seems like a good bet.

    Goldman Sachs is telling clients to buy November $14 put options on International Game Technology in anticipation of its fiscal fourth-quarter earnings, and financial guidance, disappointing investors.

    If the $16 stock declines -- something the stock has a good record of doing -- the value of the put options will increase. International Game Technology's stock is down 14% this year, and has dropped 23% in the past six months. The stock now seems to have stalled in anticipation of the company's quarterly earnings due out after the close Tuesday, Nov. 9.

    Expectations for the profits report are mixed. Of 20 analysts who follow the stock, the consensus estimate is for the company to earn 19 cents a share, flat with the year-ago period. Estimates range from a low of 17 cents to a high of 22 cents. In the past week, one analyst has lowered earnings estimates.

    Steven Kent, who follows International Game Technology for Goldman Sachs, expects the company to report below-consensus earnings of 18 cents per share. He expects 2011 guidance to be a focus; he forecasts 88 cents per share for next year, well below the consensus estimate of 97 cents. His caution reflects a view that investors are too optimistic about an increase in replacement sales of slot machines.

    John Marshall and Maria Grant, Goldman's influential derivatives strategists, advised clients that International Game Technology's options prices are inexpensive ahead of the earnings release. The slot-machine maker's at-the-money options – options whose strike prices are equal to that of the stock price -- that expire in one month have an implied volatility of 35%, which is among the lowest levels of the year.

    International Game Technology's November $14 puts cost 20 cents when the stock traded at $15.31. "We estimate put buyers profit if shares are down just 5% on or before earnings," Marshall and Grant told clients.

    Should the stock not decline, put buyers would lose all of the money spent buying the option. That said, the odds of a winning options trade are probably better than playing one of International Game Technology's slot machines.

 
IGT
17.92+0.08(+0.45%)Mar 2 4:01 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.
JD.com, Inc.
NASDAQMon, Mar 2, 2015 4:00 PM EST
NXP Semiconductors NV
NASDAQMon, Mar 2, 2015 4:00 PM EST