Coinstar Inc. (CSTR): Today's Featured Specialty Retail 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.

Coinstar ( CSTR) pushed the Specialty Retail industry lower today making it today's featured Specialty Retail laggard. The industry as a whole closed the day down 0.7%. By the end of trading, Coinstar fell 66 cents (-1.5%) to $44.35 on light volume. Throughout the day, 648,581 shares of Coinstar exchanged hands as compared to its average daily volume of 1.5 million shares. The stock ranged in price between $44.25-$45.48 after having opened the day at $45 as compared to the previous trading day's close of $45.01. Other companies within the Specialty Retail industry that declined today were: Lentuo International ( LAS), down 6.8%, Sport Chalet ( SPCHB), down 6.1%, Barnes & Noble ( BKS), down 4.9%, and iParty Corporation ( IPT), down 4.8%.
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Coinstar, Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. Coinstar has a market cap of $1.4 billion and is part of the services sector. The company has a P/E ratio of 9.1, equal to the average specialty retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are down 1.4% year to date as of the close of trading on Thursday. Currently there are eight analysts that rate Coinstar a buy, no analysts rate it a sell, and seven rate it a hold.

TheStreet Ratings rates Coinstar as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the specialty retail industry could consider SPDR S&P Retail ETF ( XRT) while those bearish on the specialty retail industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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