Expedia Inc. (EXPE): 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.

Expedia ( EXPE) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole closed the day up 0.4%. By the end of trading, Expedia fell 90 cents (-1.6%) to $56.94 on light volume. Throughout the day, 1.8 million shares of Expedia exchanged hands as compared to its average daily volume of 3.2 million shares. The stock ranged in price between $56.76-$58.30 after having opened the day at $57.87 as compared to the previous trading day's close of $57.84. Other companies within the Leisure industry that declined today were: Wendy's ( WEN), down 6.1%, Cosi ( COSI), down 3.8%, Full House Resorts ( FLL), down 3.7%, and MTR Gaming Group ( MNTG), down 3.1%.
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Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. Expedia has a market cap of $7.16 billion and is part of the services sector. The company has a P/E ratio of 17.1, below the average leisure industry P/E ratio of 21 and below the S&P 500 P/E ratio of 17.7. Shares are up 14.8% year to date as of the close of trading on Friday. Currently there are six analysts that rate Expedia a buy, one analyst rates it a sell, and 11 rate it a hold.

TheStreet Ratings rates Expedia as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, notable return on equity, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Chuy's Holdings ( CHUY), up 11.1%, Country Style Cooking Restaurant Chain ( CCSC), up 8%, Empire Resorts ( NYNY), up 5.4%, and Home Inns & Hotels Management ( HMIN), up 5%, were all gainers within the leisure industry with Melco Crown Entertainment ( MPEL) 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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