Penn National Gaming (PENN): 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.

Penn National Gaming ( PENN) 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, Penn National Gaming fell $1.14 (-2.4%) to $46.21 on heavy volume. Throughout the day, 2.1 million shares of Penn National Gaming exchanged hands as compared to its average daily volume of 785,700 shares. The stock ranged in price between $45.48-$47.66 after having opened the day at $47.05 as compared to the previous trading day's close of $47.35. Other companies within the Leisure industry that declined today were: Caesars Entertainment ( CZR), down 5.7%, Isle of Capri Casinos ( ISLE), down 4.8%, Good Times Restaurants ( GTIM), down 3.8%, and Nevada Gold & Casinos ( UWN), down 3.7%.
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Penn National Gaming, Inc. owns and manages gaming and pari-mutuel properties in the United States and Canada. The company is involved in hotel, dining, retail, admissions, program sales, concessions, racing operations, and other ancillary activities. Penn National Gaming has a market cap of $3.7 billion and is part of the services sector. The company has a P/E ratio of 21.7, above the S&P 500 P/E ratio of 17.7. Shares are up 26.7% year to date as of the close of trading on Monday. Currently there are 11 analysts that rate Penn National Gaming a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Penn National Gaming as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, 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 has had sub par growth in net income.

On the positive front, Krispy Kreme Doughnut ( KKD), up 23.5%, Granite City Food & Brewery ( GCFB), up 6.3%, Full House Resorts ( FLL), up 6.3%, and Jamba ( JMBA), up 3.9%, were all gainers within the leisure industry with Wynn Resorts ( WYNN) 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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