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 up 0.2%. By the end of trading, Melco Crown Entertainment fell 25 cents (-1.8%) to $13.55 on average volume. Throughout the day, five million shares of Melco Crown Entertainment exchanged hands as compared to its average daily volume of 4.3 million shares. The stock ranged in price between $13.43-$13.99 after having opened the day at $13.80 as compared to the previous trading day's close of $13.80. Other companies within the Leisure industry that declined today were: Good Times Restaurants ( GTIM), down 13.3%, Monarch Casino & Resort ( MCRI), down 5.8%, Caribou Coffee Company ( CBOU), down 5.6%, and Multimedia Games ( MGAM), down 4.5%.
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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 $7.89 billion and is part of the services sector. The company has a P/E ratio of 26.1, above the S&P 500 P/E ratio of 17.7. Shares are up 43.5% 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 reasonable valuation levels, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, Bluegreen Corporation ( BXG), up 55.6%, Caesars Entertainment ( CZR), up 8.6%, Ignite Restaurant Group ( IRG), up 5.4%, and Isle of Capri Casinos ( ISLE), up 4.6%, were all gainers within the leisure industry with Chipotle Mexican Grill ( CMG) 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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