3 Stocks Raising The Leisure 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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 55.93 points (-0.3%) at 16,507 as of Friday, Aug. 1, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,028 issues advancing vs. 2,012 declining with 122 unchanged.

The Leisure industry as a whole closed the day down 0.6% versus the S&P 500, which was down 0.1%. Top gainers within the Leisure industry included Premier Exhibitions ( PRXI), up 2.2%, Good Times Restaurants ( GTIM), up 2.4%, Kona Grill ( KONA), up 1.9%, Papa Murphy's Holdings ( FRSH), up 2.2% and Churchill Downs ( CHDN), up 2.1%.

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

Kona Grill ( KONA) is one of the companies that pushed the Leisure industry higher today. Kona Grill was up $0.36 (1.9%) to $18.78 on average volume. Throughout the day, 100,324 shares of Kona Grill exchanged hands as compared to its average daily volume of 69,300 shares. The stock ranged in a price between $18.50-$19.19 after having opened the day at $18.50 as compared to the previous trading day's close of $18.43.

Kona Grill, Inc. owns and operates polished casual dining restaurants in the United States. The company's restaurants offer prepared food comprising American food, various appetizers and entrees, and sushi; and alcoholic beverages, such as wines, specialty cocktails, and beers. Kona Grill has a market cap of $163.5 million and is part of the services sector. Shares are down 0.5% year-to-date as of the close of trading on Thursday. Currently there are 5 analysts who rate Kona Grill a buy, no analysts rate it a sell, and 1 rates 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 Kona Grill as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from TheStreet Ratings analysis on KONA go as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 17.5%. 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.
  • Net operating cash flow has significantly increased by 340.61% to $3.75 million when compared to the same quarter last year. In addition, KONA GRILL INC has also vastly surpassed the industry average cash flow growth rate of -80.10%.
  • Compared to its closing price of one year ago, KONA's share price has jumped by 50.92%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • KONA's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that KONA's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • 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. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, KONA GRILL INC's return on equity is below that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Kona Grill 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, Good Times Restaurants ( GTIM) was up $0.08 (2.4%) to $3.41 on heavy volume. Throughout the day, 96,690 shares of Good Times Restaurants exchanged hands as compared to its average daily volume of 51,100 shares. The stock ranged in a price between $3.25-$3.56 after having opened the day at $3.33 as compared to the previous trading day's close of $3.33.

Good Times Restaurants, Inc., through its subsidiaries, develops, owns, operates, and franchises hamburger-oriented drive-through restaurants under the Good Times Burgers & Frozen Custard name in Colorado. It also has franchised restaurants in North Dakota and Wyoming. Good Times Restaurants has a market cap of $24.1 million and is part of the services sector. Shares are up 39.3% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Good Times Restaurants 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 Good Times Restaurants 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and poor profit margins.

Highlights from TheStreet Ratings analysis on GTIM go as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 22.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GTIM's debt-to-equity ratio is very low at 0.02 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 2.86, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for GOOD TIMES RESTAURANTS INC is currently extremely low, coming in at 12.85%. Regardless of GTIM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, GTIM's net profit margin of -7.78% significantly underperformed when compared to the industry average.
  • 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 48.1% when compared to the same quarter one year ago, falling from -$0.32 million to -$0.48 million.

You can view the full analysis from the report here: Good Times Restaurants 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.

Premier Exhibitions ( PRXI) was another company that pushed the Leisure industry higher today. Premier Exhibitions was up $0.02 (2.2%) to $0.73 on average volume. Throughout the day, 97,224 shares of Premier Exhibitions exchanged hands as compared to its average daily volume of 69,300 shares. The stock ranged in a price between $0.70-$0.73 after having opened the day at $0.70 as compared to the previous trading day's close of $0.71.

Premier Exhibitions, Inc., together with its subsidiaries, is engaged in presenting museum-quality touring exhibitions to public worldwide. The company operates through two segments, Exhibition Management and RMS Titanic. Premier Exhibitions has a market cap of $34.6 million and is part of the services sector. Shares are down 38.8% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Premier Exhibitions a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Premier Exhibitions 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 disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on PRXI go as follows:

  • PREMIER EXHIBITIONS 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, PREMIER EXHIBITIONS INC swung to a loss, reporting -$0.01 versus $0.03 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 224.8% when compared to the same quarter one year ago, falling from $0.97 million to -$1.21 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, PREMIER EXHIBITIONS 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 61.37%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 41.17% is the gross profit margin for PREMIER EXHIBITIONS 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, PRXI's net profit margin of -16.17% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: Premier Exhibitions 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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