Coinstar Inc. (CSTR): 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.

Coinstar ( CSTR) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day down 0.2%. By the end of trading, Coinstar fell $1.05 (-2.2%) to $46.89 on light volume. Throughout the day, 720,701 shares of Coinstar exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in price between $46.83-$48.36 after having opened the day at $47.69 as compared to the previous trading day's close of $47.94. Other companies within the Services sector that declined today were: Liberty Media Corporation ( LMCB), down 87.3%, NTN Buzztime ( NTN), down 11.1%, Education Management Corporation ( EDMC), down 10%, and Globus Maritime ( GLBS), down 8.8%.
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Coinstar, Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. Coinstar has a market cap of $1.45 billion and is part of the specialty retail industry. The company has a P/E ratio of 9.8, below the S&P 500 P/E ratio of 17.7. Shares are down 7.8% year to date as of the close of trading on Friday. Currently there are nine analysts that rate Coinstar a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Coinstar as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, DLH Holdings ( DLHC), up 20.8%, Point.360 ( PTSX), up 16.9%, Dover Saddlery ( DOVR), up 14.7%, and TravelCenters of America ( TA), up 11.8%, were all gainers within the services sector with Limited Brands ( LTD) 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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