Konami Corp (KNM) is trading in a class of its own, surging more than 50% in July and August while the market was on the downswing. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is supercharged with momentum.
Konami Corp. develops and publishes video game software products for stationary and portable consoles worldwide. The company was founded in 1969 and has a market cap of $4.91 billion.
KNM was already having a great year before the company's strong Q1 results from early August supercharged shares into a new multi-year high.
Revenue for the period was up 13% from last year to $680 million. Earnings were also up big, coming in at 36 cents, a huge gain from last year's 11 cents.
The company's biggest gains came from its smallest segment, Pachinko and Pachinki slot machines, with sales up 40% from last year. Its largest segment, Digital Entertainment, comprising almost 50% of total revenue, saw sales increase 4%.
Konami has used its recent earnings momentum to strengthen its balance sheet, with cash and short-term investments up $127 million from last year to $663 million. Total debt stands at $723 million.
We saw very bullish movement in estimates off the good quarter, with the current year adding 32 cents to $1.79 while the next-year estimate gained 35 cents to $1.97, a solid 10% growth projection.
In light of the gains, the valuation pictures does look a bit pricey, with a PEG ratio of 2, twice the benchmark of 1 for value.
On the chart, KNM had been trading strong for most of the year before jumping higher on the good quarter in early August. Look for support from the trend line an any weakness. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.