3 Stocks Pushing The Leisure Industry Lower

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.

The Leisure industry as a whole closed the day down 0.4% versus the S&P 500, which was unchanged. Laggards within the Leisure industry included Full House Resorts ( FLL), down 2.0%, Red Lion Hotels ( RLH), down 1.6%, MTR Gaming Group ( MNTG), down 1.7%, Lakes Entertainment ( LACO), down 4.7% and Cosi ( COSI), down 2.4%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

MTR Gaming Group ( MNTG) is one of the companies that pushed the Leisure industry lower today. MTR Gaming Group was down $0.08 (1.7%) to $4.82 on light volume. Throughout the day, 2,905 shares of MTR Gaming Group exchanged hands as compared to its average daily volume of 31,800 shares. The stock ranged in price between $4.79-$4.88 after having opened the day at $4.88 as compared to the previous trading day's close of $4.90.

MTR Gaming Group, Inc., through its subsidiaries, operates in racing, gaming, and entertainment businesses. MTR Gaming Group has a market cap of $138.8 million and is part of the services sector. Shares are down 5.0% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates MTR Gaming Group as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally high debt management risk.

Highlights from TheStreet Ratings analysis on MNTG go as follows:

  • MTR GAMING GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MTR GAMING GROUP INC reported poor results of -$0.33 versus -$0.20 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 690.5% when compared to the same quarter one year ago, falling from -$0.79 million to -$6.21 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, MTR GAMING GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 3655.97 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, MNTG has managed to keep a strong quick ratio of 2.01, which demonstrates the ability to cover short-term cash needs.
  • MNTG, with its decline in revenue, slightly underperformed the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 6.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

You can view the full analysis from the report here: MTR Gaming Group Ratings Report

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At the close, Red Lion Hotels ( RLH) was down $0.09 (1.6%) to $5.66 on light volume. Throughout the day, 8,299 shares of Red Lion Hotels exchanged hands as compared to its average daily volume of 25,800 shares. The stock ranged in price between $5.62-$5.76 after having opened the day at $5.76 as compared to the previous trading day's close of $5.75.

Red Lion Hotels Corporation, a hospitality and leisure company, owns, operates, and franchises hotels under its Red Lion Hotels, Red Lion Inns & Suites, and Leo Hotel Collection brands. It operates in three segments: Hotels, Franchise, and Entertainment. Red Lion Hotels has a market cap of $115.3 million and is part of the services sector. Shares are down 5.0% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates Red Lion Hotels as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on RLH go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Hotels, Restaurants & Leisure industry. The net income has decreased by 13.2% when compared to the same quarter one year ago, dropping from -$3.11 million to -$3.52 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, RED LION HOTELS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RED LION HOTELS CORP is currently extremely low, coming in at 2.59%. Regardless of RLH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RLH's net profit margin of -11.57% significantly underperformed when compared to the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, RLH has underperformed the S&P 500 Index, declining 6.40% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • RED LION HOTELS CORP's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, RED LION HOTELS CORP continued to lose money by earning -$0.43 versus -$0.58 in the prior year.

You can view the full analysis from the report here: Red Lion Hotels Ratings Report

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Full House Resorts ( FLL) was another company that pushed the Leisure industry lower today. Full House Resorts was down $0.03 (2.0%) to $1.47 on light volume. Throughout the day, 7,942 shares of Full House Resorts exchanged hands as compared to its average daily volume of 47,400 shares. The stock ranged in price between $1.44-$1.50 after having opened the day at $1.44 as compared to the previous trading day's close of $1.50.

Full House Resorts, Inc. owns, develops, manages, and invests in gaming-related enterprises. Full House Resorts has a market cap of $27.9 million and is part of the services sector. Shares are down 47.1% year-to-date as of the close of trading on Monday. Currently there are 2 analysts who rate Full House Resorts a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Full House Resorts as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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Highlights from TheStreet Ratings analysis on FLL go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 181.8% when compared to the same quarter one year ago, falling from -$0.83 million to -$2.35 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, FULL HOUSE RESORTS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 225.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • FULL HOUSE RESORTS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FULL HOUSE RESORTS INC swung to a loss, reporting -$0.21 versus $1.49 in the prior year. This year, the market expects an improvement in earnings (-$0.02 versus -$0.21).
  • FLL, with its decline in revenue, underperformed when compared the industry average of 6.0%. Since the same quarter one year prior, revenues fell by 16.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

You can view the full analysis from the report here: Full House Resorts Ratings Report

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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