VeriFone (PAY) and Dave & Busters (PLAY) have very similar stock symbols, but had very different days yesterday.
PLAY stock opened 8.5% higher on Wednesday, after Dave & Busters released a great earnings report. PAY stock had a very different day—PAY was trading at 28 when the stock market closed on Tuesday, and opened at 20 after VeriFone reported earnings on Wednesday morning. A decline of nearly 30%!
Situations like this reveal an interesting disparity in investor attitudes toward wins and losses.
Investors who bought PLAY stock before yesterday are very happy, and likely patting themselves on the back for picking such a winner.
PAY stock investors, on the other hand, are probably shocked, and less concerned with whether they should have seen this coming than with simply dumping their lousy investment.
As in many other aspects of life, when things go their way, people tend to congratulate themselves, but when things go pear-shaped, people often blame anyone but themselves.
Luckily, with all the data at our fingertips, it’s actually possible to get an answer. The question is: Should we have seen this one coming?
PAY vs. PLAY
First, there are the stock charts—PAY has frankly looked lousy for months:
PLAY stock hasn’t been particularly strong recently, but was trading in a solid range following a strong run-up during the prior year:
VeriFone vs. Dave & Busters
Looking a little deeper, there are even more reasons to say, “We could have seen this one coming.” Here are some key metrics on both PAY and PLAY:
In short, VeriFone has been in trouble for some time, and it’s no surprise to me that investors are now fleeing the stock. Dave & Buster’s, by contrast, looks like a very healthy company, and its latest earnings report confirms that.
In Cabot Dividend Investor, which I write, you can find high-yield, high-growth dividend stocks that will help you grow your portfolio. Our current top holding is up 76% and the rest of our stocks are on target to deliver similar gains in the months to come.
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