Royal Caribbean Cruises Ltd. (RCL): 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.

Royal Caribbean Cruises ( RCL) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole was unchanged today. By the end of trading, Royal Caribbean Cruises fell 39 cents (-1.1%) to $35.22 on average volume. Throughout the day, 1.5 million shares of Royal Caribbean Cruises exchanged hands as compared to its average daily volume of two million shares. The stock ranged in price between $35.09-$35.70 after having opened the day at $35.52 as compared to the previous trading day's close of $35.61. Other companies within the Leisure industry that declined today were: Bowl America Incorporated ( BWL.A), down 5.6%, Monarch Casino & Resort ( MCRI), down 4.7%, Empire Resorts ( NYNY), down 4.5%, and Yum Brands ( YUM), down 4.2%.
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Royal Caribbean Cruises Ltd. operates in the cruise vacation industry worldwide. It owns five cruise brands, which comprise Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisieres de France. Royal Caribbean Cruises has a market cap of $7.81 billion and is part of the services sector. The company has a P/E ratio of 17.5, below the S&P 500 P/E ratio of 17.7. Shares are up 5.3% year to date as of the close of trading on Monday. Currently there are eight analysts that rate Royal Caribbean Cruises a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Royal Caribbean Cruises as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Asia Entertainment & Resources ( AERL), up 6.8%, Canterbury Park Holding Corporation ( CPHC), up 5.4%, Krispy Kreme Doughnuts ( KKD), up 4.5%, and PokerTek ( PTEK), up 4%, were all gainers within the leisure industry with MGM Resorts International ( MGM) 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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