Melco Crown Entertainment Ltd (MPEL): Today's Featured Leisure Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Melco Crown Entertainment ( MPEL) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole closed the day down 0.5%. By the end of trading, Melco Crown Entertainment fell 45 cents (-3.4%) to $12.80 on average volume. Throughout the day, 6.8 million shares of Melco Crown Entertainment exchanged hands as compared to its average daily volume of 4.8 million shares. The stock ranged in price between $12.66-$13.10 after having opened the day at $13.10 as compared to the previous trading day's close of $13.25. Other companies within the Leisure industry that declined today were: Marcus Corporation ( MCS), down 8.5%, Asia Entertainment & Resources ( AERL), down 8.4%, Ctrip.com International ( CTRP), down 4.7%, and MGM Resorts International ( MGM), down 3.3%.
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Melco Crown Entertainment Limited, through its subsidiaries, engages in the development, ownership, and operation of casino gaming and entertainment resort facilities primarily in Macau. Melco Crown Entertainment has a market cap of $7.16 billion and is part of the services sector. The company has a P/E ratio of 23.7, above the average leisure industry P/E ratio of 16.8 and above the S&P 500 P/E ratio of 17.7. Shares are up 37.7% year to date as of the close of trading on Wednesday. Currently there are 10 analysts that rate Melco Crown Entertainment a buy, one analyst rates it a sell, and one rates it a hold.

TheStreet Ratings rates Melco Crown Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, Caribou Coffee Company ( CBOU), up 6.5%, PokerTek ( PTEK), up 5.3%, Kona Grill ( KONA), up 4.2%, and Rick's Cabaret International ( RICK), up 3.5%, were all gainers within the leisure industry with Buffalo Wild Wings ( BWLD) being today's featured leisure industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the leisure industry could consider PowerShares Dynamic Leisure&Entert ( PEJ) while those bearish on the leisure industry could consider ProShares Ultra Sht Consumer Services ( SCC).

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