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.
Leucadia National Corporation (
LUK) pushed the Conglomerates sector lower today making it today's featured Conglomerates laggard. The sector as a whole closed the day up 0.2%. By the end of trading, Leucadia National Corporation fell 50 cents (-1.9%) to $26.40 on heavy volume. Throughout the day, four million shares of Leucadia National Corporation exchanged hands as compared to its average daily volume of 1.7 million shares. The stock ranged in price between $26.27-$27.14 after having opened the day at $26.95 as compared to the previous trading day's close of $26.90.
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Leucadia National Corporation engages in beef processing, manufacturing, gaming entertainment, real estate activities, medical product development, and winery operations in the United States and internationally. Leucadia National Corporation has a market cap of $6.54 billion and is part of the conglomerates industry. The company has a P/E ratio of 7.7, below the S&P 500 P/E ratio of 17.7. Shares are up 12.4% year to date as of the close of trading on Thursday.
TheStreet Ratings rates Leucadia National Corporation as a
buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the conglomerates sector could consider
SPDR Trust Series one (
SPY) while those bearish on the conglomerates sector could consider
ProShares Short S&P 500 (
SH).
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