Pre-Market Laggard: Melco Crown Entertainment (MPEL)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Melco Crown Entertainment ( MPEL) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Melco Crown Entertainment as such a stock due to the following factors:

  • MPEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $175.3 million.
  • MPEL traded 11,021 shares today in the pre-market hours as of 8:12 AM.
  • MPEL is down 6.4% today from yesterday's close.

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More details on MPEL:

Melco Crown Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment resort facilities in Macau. MPEL has a PE ratio of 53.9. Currently there are 12 analysts that rate Melco Crown Entertainment a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Melco Crown Entertainment has been 2.9 million shares per day over the past 30 days. Melco Crown Entertainment has a market cap of $22.5 billion and is part of the services sector and leisure industry. Shares are down 0.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Melco Crown Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income 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.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 23.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 68.42% and other important driving factors, this stock has surged by 102.82% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MPEL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MELCO CROWN ENTMT LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MELCO CROWN ENTMT LTD increased its bottom line by earning $0.76 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus $0.76).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 71.1% when compared to the same quarter one year prior, rising from $104.87 million to $179.40 million.
  • MPEL's debt-to-equity ratio of 0.72 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.57 is very high and demonstrates very strong liquidity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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