Starbucks Corporation (SBUX): 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.

Starbucks Corporation ( SBUX) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole closed the day down 1.2%. By the end of trading, Starbucks Corporation fell 67 cents (-1.3%) to $51.12 on light volume. Throughout the day, 6.1 million shares of Starbucks Corporation exchanged hands as compared to its average daily volume of 8.4 million shares. The stock ranged in price between $50.94-$51.98 after having opened the day at $51.65 as compared to the previous trading day's close of $51.79. Other companies within the Leisure industry that declined today were: Asia Entertainment & Resources ( AERL), down 11%, PokerTek ( PTEK), down 10.2%, Darden Restaurants ( DRI), down 9.6%, and Ctrip.com International ( CTRP), down 8.1%.
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Starbucks Corporation purchases and roasts whole bean coffees. It operates 6,705 company-operated stores and 4,082 licensed stores in the United States; and 2,326 company-operated stores and 3,890 licensed stores in Canada, the U.K., China, Germany, Thailand, and internationally. Starbucks Corporation has a market cap of $38.57 billion and is part of the services sector. The company has a P/E ratio of 29, above the S&P 500 P/E ratio of 17.7. Shares are up 12.7% year to date as of the close of trading on Monday. Currently there are 17 analysts that rate Starbucks Corporation a buy, no analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Starbucks Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Caribou Coffee Company ( CBOU), up 4.6%, Morgans Hotel Group Company ( MHGC), up 4.4%, Town Sports International Holdings ( CLUB), up 3.9%, and Marcus Corporation ( MCS), up 2.6%, 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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