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 1.4%. By the end of trading, Starbucks Corporation fell $0.99 (-1.6%) to $62.34 on average volume. Throughout the day, 4,150,248 shares of Starbucks Corporation exchanged hands as compared to its average daily volume of 4,515,700 shares. The stock ranged in price between $62.31-$63.30 after having opened the day at $63.04 as compared to the previous trading day's close of $63.33. Other companies within the Leisure industry that declined today were: Canterbury Park Holding Corporation ( CPHC), down 7.7%, Empire Resorts ( NYNY), down 6.9%, Caesars Entertainment ( CZR), down 6.0% and Boyd Gaming Corporation ( BYD), down 5.8%.
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Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. As of September 30, 2012, the company operated 9,405 company-operated stores and 8,661 licensed stores. Starbucks Corporation has a market cap of $47.5 billion and is part of the services sector. The company has a P/E ratio of 32.2, above the S&P 500 P/E ratio of 17.7. Shares are up 18.3% year to date as of the close of trading on Tuesday. Currently there are 15 analysts that rate Starbucks Corporation a buy, no analysts rate it a sell, and 7 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, growth in earnings per share, increase in net income, 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, Morgans Hotel Group Company ( MHGC), down 4.9%, Bob Evans Farms ( BOBE), down 3.1%, PokerTek ( PTEK), down 2.5% and Scientific Games Corporation ( SGMS), down 1.6%.

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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