Momentum Stock: Shuffle Master
Shuffle Master (SHFL) is a Zacks #2 Rank (Buy) after seeing earnings estimates move meaningfully higher.
Shuffle Master manufactures and distributes gaming devices, and operates inter-casino linked systems and slot routes. It leases, licenses, and sells its products. The company operates through four segments: Utility, Proprietary Table Games, Electronic Table Systems, and Electronic Gaming Machines. The company markets its products to casinos and other legal gaming establishments through its direct sales force, and various distributors and/or representatives worldwide. Shuffle Master, Inc. was founded in 1983 and is headquartered in Las Vegas, Nevada.
Shuffle Master Tops Expectations in Each of the Last Three Quarters
Shuffle Master has topped the Zacks Consensus Estimate in each of the last three quarters. While the average beat over the last three quarters has only a little more than two cents, its translates into 19% positive surprise.
The positive surprises have been beneficial for shareholders, as the stock has moved higher by an average of 12% following the beats. The last two beats have also included stronger top line performance as well, with the surprises growing on an absolute and percentage basis.
Shuffle Master Most Recent Earnings
On March 5, 2012, Shuffle Master reported revenue of $56 million, $8 million more than the Zacks Consensus Estimate, and higher than the $44 million reported in the year ago period. Earnings per share of $0.14 was $0.04 higher than expected or a 40% positive earnings surprise. The stock moved higher by 10% following the beat.
Estimates have moved higher
Shuffle Master has seen its earnings estimates move higher over the last few months. The Zacks Consensus Estimate in February 2012 was $0.70 and has since moved to $0.76. Estimates for 2013 were also bumped higher by a penny over the same time frame.
Shuffle Master trades at 26x trailing PE, slightly above the industry average of 23x. The forward PE of 22x has Shuffle Master trading at a discount to the industry average of 23x. Price to book and price to sales are a different story. Both multiples are 3.8x for the company and 1.5x for the industry average. Generally these multiples are a little more shuffled up. The Chart
The chart shows Shuffle Master in an upward channel for the past several months. Currently it is at the low end of the channel and has not breached the support line. This implies that the stock should remain in this channel and could move back the high end after testing the low. The stock is well above the 200 day moving average and has only recently moved below the 21 day moving average. The 50 day moving average appears to be a key level of support for the stock. Shuffle Master is a Zacks #2 Rank (Buy).
This Week’s Momentum Zacks Rank Buy Stocks
Mattress Firm Holding Corp. (MFRM) has been on an absolute tear recently, and for good reason. The company recently delivered same-store sales growth of 24.8% for the fourth quarter and a huge earnings beat. And management provided bullish guidance going forward, prompting analysts to revise their estimates significantly higher. It is a Zacks #1 Rank (Strong Buy) stock.
Smith & Wesson. (SHWC) These are the best of times for the gun manufacturers. Demand is so strong that Smith & Wesson Holding Corporation (SWHC) is trying to increase capacity. Shares of this Zacks #1 Rank (Strong Buy) are hot, recently hitting multi-year highs.
Sun Hydraulics (SNHY) is a Zacks #1 Rank (Strong Buy) after posting five of six positive earnings surprises.
Coinstar (CSTR) Coinstar is due to report full Q1 earnings on April 26th, but pre-released numbers last Thursday, sending shares 12% higher.
Multimedia Games (MGAM) has seen limited analyst coverage in the past, but a recent strong beat has helped make the stock a Zacks #1 Rank (Strong Buy).