Huge volatility with $2 price swings day to day. BYI reported 3rd quarter 2014 earnings of $1.10 per share. This beat 2nd quarter by $0.04 and beat last year's 3rd quarter results by 18.28%. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.
I have given up trying to understand why this stock has the huge swings that it does. Personally think with the market the way it is nothing seems to make sense. I have noticed there does not seem to be all the activity on this message board and therefore I don't think this stock seems to have the day traders as much. I could be wrong. But personally I could not find why this stock dropped from the $82 price that it was. I have found that they always seem to be positive reviews on their slot machines where they win awards and they always have positive financials. I think this is a stock that is a long term investment. If someone has the answer on why we swing the way we do I would live to hear it.
The reason it has fallen is because earnings have been very weak at IGT. IGT is the biggest player in the space. When one player is weak, it signals to the stock market that maybe everything isn't so dandy in the casino equipment business, so funds and institutions decrease their holdings of casino equipment makers across the board.
Here's how to think of it: what if suddenly McDonald's sales tank, and you own Taco Bell. Wouldn't you consider selling the Taco Bell if you thought there might be a bigger issue with fast food?
In the longer run, the stock price will follow earnings. Earnings should be fine, and once IGT is bought out, it will actually be bullish for BYI as it will free up institutional money that wants to stay in the space and will put their money into BYI or SGMS. Additionally, if Japan legalizes gambling this fall, that will be quite bullish for the sector. Finally, when things are in play, and discussion of mergers and acquisitions increase, it can be beneficial for everybody in the space as more eyeballs kicking tires usually leads to a rise in the stocks.
That's the long answer. The short answer, pick good companies and give them time.