3 Leisure Stocks Driving The Industry Higher

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 100 points (0.6%) at 16,838 as of Thursday, June 5, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 2,349 issues advancing vs. 623 declining with 153 unchanged.

The Leisure industry as a whole closed the day up 0.9% versus the S&P 500, which was up 0.6%. Top gainers within the Leisure industry included Lakes Entertainment ( LACO), up 6.0%, Luby's ( LUB), up 8.6%, Asia Entertainment & Resources ( IKGH), up 1.6%, Rick's Cabaret International ( RICK), up 2.4% and Monarch Casino & Resort ( MCRI), up 5.3%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Asia Entertainment & Resources ( IKGH) is one of the companies that pushed the Leisure industry higher today. Asia Entertainment & Resources was up $0.05 (1.6%) to $3.24 on average volume. Throughout the day, 85,834 shares of Asia Entertainment & Resources exchanged hands as compared to its average daily volume of 88,100 shares. The stock ranged in a price between $3.10-$3.24 after having opened the day at $3.17 as compared to the previous trading day's close of $3.19.

Iao Kun Group Holding Company Limited, through its subsidiaries, promotes VIP gaming rooms in Macau, the People's Republic of China. Its VIP gaming rooms are located in City of Dreams Hotel & Casino, Sands Cotai Central, StarWorld Hotel and Casino, Galaxy Macau Resort, and Le Royal Arc Casino. Asia Entertainment & Resources has a market cap of $184.1 million and is part of the services sector. Shares are up 3.6% year-to-date as of the close of trading on Wednesday. Currently there are 3 analysts who rate Asia Entertainment & Resources a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates Asia Entertainment & Resources as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on IKGH go as follows:

  • The revenue growth greatly exceeded the industry average of 6.0%. Since the same quarter one year prior, revenues rose by 28.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • IKGH's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, IKGH has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its price level of one year ago, IKGH is down 27.50% to its most recent closing price of 3.19. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • 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, IAO KUN GROUP HOLDING CO LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for IAO KUN GROUP HOLDING CO LTD is rather low; currently it is at 17.22%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.97% significantly trails the industry average.

You can view the full analysis from the report here: Asia Entertainment & Resources 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.

At the close, Luby's ( LUB) was up $0.42 (8.6%) to $5.29 on average volume. Throughout the day, 37,325 shares of Luby's exchanged hands as compared to its average daily volume of 47,800 shares. The stock ranged in a price between $4.86-$5.29 after having opened the day at $4.90 as compared to the previous trading day's close of $4.87.

Luby's, Inc., through its subsidiaries, operates as a multi-brand restaurant company in the United States. The company operates in three segments: Company Owned Restaurants, Franchise Operations, and Culinary Contract Services. Luby's has a market cap of $140.5 million and is part of the services sector. Shares are down 36.9% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Luby's a buy, no analysts rate it a sell, and none rate it a hold.

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

TheStreet Ratings rates Luby's as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from TheStreet Ratings analysis on LUB go as follows:

  • LUB's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • LUB's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.13 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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, LUBYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • LUBYS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, LUBYS INC reported lower earnings of $0.15 versus $0.27 in the prior year. For the next year, the market is expecting a contraction of 133.3% in earnings (-$0.05 versus $0.15).
  • 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 1313.3% when compared to the same quarter one year ago, falling from $0.18 million to -$2.18 million.

You can view the full analysis from the report here: Luby's 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.

Lakes Entertainment ( LACO) was another company that pushed the Leisure industry higher today. Lakes Entertainment was up $0.28 (6.0%) to $4.93 on average volume. Throughout the day, 34,117 shares of Lakes Entertainment exchanged hands as compared to its average daily volume of 39,000 shares. The stock ranged in a price between $4.64-$4.93 after having opened the day at $4.70 as compared to the previous trading day's close of $4.65.

Lakes Entertainment, Inc. develops, finances, manages, and owns casino properties in the United States. Lakes Entertainment has a market cap of $126.2 million and is part of the services sector. Shares are up 17.7% year-to-date as of the close of trading on Wednesday. Currently there are no analysts who rate Lakes Entertainment a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Lakes Entertainment as a hold. 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 and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from TheStreet Ratings analysis on LACO go as follows:

  • LACO's very impressive revenue growth greatly exceeded the industry average of 6.0%. Since the same quarter one year prior, revenues leaped by 272.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • LACO's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 17.12, which clearly demonstrates the ability to cover short-term cash needs.
  • 40.38% is the gross profit margin for LAKES ENTERTAINMENT INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LACO's net profit margin of -14.36% significantly underperformed when compared to the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, LAKES ENTERTAINMENT INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • 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 430.9% when compared to the same quarter one year ago, falling from -$0.33 million to -$1.77 million.

You can view the full analysis from the report here: Lakes Entertainment 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.

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.

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