Lamar Advertising Co (LAMR): Today's Featured Services 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.

Lamar Advertising ( LAMR) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 1.2%. By the end of trading, Lamar Advertising fell 42 cents (-1.1%) to $39.72 on average volume. Throughout the day, 1.5 million shares of Lamar Advertising exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in price between $39.30-$39.90 after having opened the day at $39.70 as compared to the previous trading day's close of $40.14. Other companies within the Services sector that declined today were: Innovaro ( INV), down 13.8%, QKL Stores ( QKLS), down 12.5%, FreeSeas ( FREE), down 11.7%, and SED International Holdings ( SED), down 9.7%.
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Lamar Advertising Company, together with its subsidiaries, provides outdoor advertising services. Its outdoor advertising displays include billboards, such as bulletins, posters, and digital billboards; and logo signs to advertise nearby gas, food, camping, lodging, and other attractions. Lamar Advertising has a market cap of $3.18 billion and is part of the media industry. The company has a P/E ratio of 449.2, above the S&P 500 P/E ratio of 17.7. Shares are up 47% year to date as of the close of trading on Monday. Currently there are three analysts that rate Lamar Advertising a buy, two analysts rate it a sell, and five rate it a hold.

TheStreet Ratings rates Lamar Advertising as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

On the positive front, PokerTek ( PTEK), up 44.4%, Arbitron Corporation ( ARB), up 23.6%, DS Torm ( TRMD), up 21.1%, and CIBT Education Group ( MBA), up 17.5%, were all gainers within the services sector with FedEx Corporation ( FDX) being today's featured services sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

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