Royal Caribbean Cruises Ltd. (RCL): 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.

Royal Caribbean Cruises ( RCL) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole closed the day down 0.2%. By the end of trading, Royal Caribbean Cruises fell 44 cents (-1.4%) to $30.56 on average volume. Throughout the day, 1.7 million shares of Royal Caribbean Cruises exchanged hands as compared to its average daily volume of 2.2 million shares. The stock ranged in price between $30.31-$30.88 after having opened the day at $30.73 as compared to the previous trading day's close of $31. Other companies within the Leisure industry that declined today were: Orbitz Worldwide ( OWW), down 6.5%, Arcos Dorados Holdings ( ARCO), down 3.9%, Frisch's Restaurants ( FRS), down 3.5%, and Chuy's Holdings ( CHUY), down 3.4%.
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Royal Caribbean Cruises Ltd. operates in the cruise vacation industry worldwide. It owns five cruise brands, which comprise Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisieres de France. Royal Caribbean Cruises has a market cap of $6.69 billion and is part of the services sector. The company has a P/E ratio of 14, equal to the average leisure industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 25.2% year to date as of the close of trading on Thursday. Currently there are seven analysts that rate Royal Caribbean Cruises a buy, no analysts rate it a sell, and six rate it a hold.

TheStreet Ratings rates Royal Caribbean Cruises as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

On the positive front, Century Casinos ( CNTY), up 7.1%, Granite City Food & Brewery ( GCFB), up 3.2%, Monarch Casino & Resort ( MCRI), up 3.1%, and Lakes Entertainment ( LACO), up 2%, were all gainers within the leisure industry with Las Vegas Sands ( LVS) 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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