PreMarket Prep Stock Of The Day: Penn National Gaming

On most occasions, when an issue is in a prolonged retreat and misses on earnings, it is going to get slammed. The above scenario applies to Penn National Gaming PENN, which is the PreMarket Prep Stock of the Day.

Volatile In 2021: After ending 2020 at $86.37, it had a major rally that did end until March, when the issue peaked at $142. Besides being a heavily followed momentum stock, the addition of the company to the S&P 500 index on March 22 was the major catalyst in the last leg of the rally.

It should be noted the issue made its all-time high and all-time closing high ($136.47) one week prior to its being added to the index.

Going back to February, the issue has been lower in eight of the last nine months, including this month.

Recent Penn National Price Action: As late as Oct. 16, the issue appeared to be on the rebound, when it peaked at $81.66 and ended that session at $81.34. Yet investors were leaning the right way into the report, as it traded lower in nine of the next 11 sessions leading up to the third-quarter report Thursday morning. It could not even trade higher in Wednesday’s session ($73 to $72.93), when many of the indexes sprinted to new all-time highs.

Penn National's Q3 Report: Before the open, the company reported quarterly earnings of 52 cents per share. This is a 44.09% decrease over earnings of $93 cents per share from the same period last year.

The company reported quarterly sales of $1.51 billion, which beat the analyst consensus estimate of $1.51 billion. This is a 33.81% increase over sales of $1.13 billion in the same period last year.

PreMarket Prep's Take: When the issue was being covered on the show Thursday, it already trading lower by nearly $3 at the $70 area.

Co-host Dennis Dick, who is long shares of the company, lamented over it and the price action.

"I have bought and shares over the past year and recently purchased at $76,” he said.

“The company is a “reopening play” to me, but it is not participating.”

Although the issue had traded down to $67.85 in the premarket session, the author noted it was important for the issue to hold above the trio of lows in the $70 handle going back to Aug. 24.

The discussion on the issue from Thursday’s show can be found here:

PENN Price Action: After a lower open Thursday ($69.35 vs. $72.73), it surpassed the bottom of Wednesday’s range ($70.40), reaching $70.90 and sharply reversing course. It has continued to make new lows for the session and was down 20.84% at $57.57 Thursday afternoon. 

The prior low for the year was made in August at $61.02.

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.