This week’s stock performers: The best and the worst locally
5 October 2012
Biggest gainer: Allegiant Travel Co.
The owner of airline Allegiant Air this week announced the formation of Allegiant Systems, a joint venture with AvIntel and Lixar IT focusing on airline industry automation.
CEO Maury Gallagher said in a statement that the venture could “revolutionize airline technology strategies.”
Allegiant Systems, also called “G4 Systems,” will provide mobile technology services for airline operations including a “Buy-on-Board” system and cabin crew automation.
After the market closed Friday, Allegiant said its September load factor, or the percentage of filled seats, was 82.8 percent, down 3.2 percentage points from September 2011. Because of additional flights, the passenger count grew 9.5 percent to 436,013.
Allegiant stock finished at $67.38, up $4.02, or 6.3 percent, from its Sept. 28 close. Overall, the Standard & Poor’s 500 Index rose 1.4 percent this week in part because of Friday’s jobs report showing the U.S. unemployment rate falling to 7.8 percent, the lowest level of the Obama administration.
Biggest loser: Global Cash Access
The strong U.S. jobs report Friday didn’t do much to help gaming stocks, which fell nearly across the board this week from their closing prices on Sept. 28.
Boyd Gaming Corp. was off 5 percent, Caesars Entertainment Corp. fell 3.2 percent, Las Vegas Sands Corp. fell 2.1 percent, MGM Resorts International fell 1.9 percent and Wynn Resorts Ltd. slipped 1.4 percent.
Analysts at the G2E gaming conference in Las Vegas noted the gaming rebound story appears to be little changed, with slow progress in Las Vegas and continued growth forecast on the East Coast and in Asia.
The biggest loser among all local stocks for the second consecutive week was Global Cash Access Holdings Inc. (GCA), which fell 42 cents, or 5.2 percent, to close at $7.63. Analyst commentary focused on GCA losing a chunk — but not all — of its business with Station Casinos LLC, as well as it losing some business with some Isle of Capri Casinos properties. The company operates casino ATMs and provides casino credit services.
Sterne Agee analyst David Bain suggested the company’s financial outlook remains unchanged because GCA has known of these lost contracts for six months and that neither Station nor Isle of Capri are among GCA’s top 10 customers.
He has a “buy” rating on GCA with a price target of $13 and sees GCA as maintaining a strong presence on casino floors and potentially benefitting from the launch of online gambling because it’s licensed to provide cash services to Nevada online intrastate poker operators.
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