3 Stocks Pushing The Media 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 Media industry as a whole closed the day down 1.3% versus the S&P 500, which was down 0.1%. Laggards within the Media industry included Radio One ( ROIA), down 2.6%, Point 360 ( PTSX), down 10.6%, RLJ Entertainment ( RLJE), down 4.6%, Liberty Media Corporation ( LMCB), down 3.2% and Educational Development ( EDUC), down 2.7%.

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

Carmike Cinemas ( CKEC) is one of the companies that pushed the Media industry lower today. Carmike Cinemas was down $0.80 (2.4%) to $32.77 on light volume. Throughout the day, 97,380 shares of Carmike Cinemas exchanged hands as compared to its average daily volume of 163,600 shares. The stock ranged in price between $32.68-$33.76 after having opened the day at $33.63 as compared to the previous trading day's close of $33.57.

Carmike Cinemas, Inc., together with its subsidiaries, operates as a motion picture exhibitor in the United States. The company operates digital cinema and 3-D cinema theatres that show films on a first-run basis; and discount theatres primarily serving small to mid-size non-urban markets. Carmike Cinemas has a market cap of $761.8 million and is part of the services sector. Shares are up 20.6% year-to-date as of the close of trading on Friday. Currently there are 8 analysts who rate Carmike Cinemas a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Carmike Cinemas as a buy. 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, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on CKEC go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 7.9%. 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.
  • Despite the current debt-to-equity ratio of 1.84, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Despite the fact that CKEC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.56 is high and demonstrates strong liquidity.
  • Compared to its closing price of one year ago, CKEC's share price has jumped by 77.54%, 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.
  • Net operating cash flow has slightly increased to $26.98 million or 3.49% when compared to the same quarter last year. Despite an increase in cash flow, CARMIKE CINEMAS INC's cash flow growth rate is still lower than the industry average growth rate of 14.05%.
  • CARMIKE CINEMAS 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 of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CARMIKE CINEMAS INC reported lower earnings of $0.25 versus $5.49 in the prior year. This year, the market expects an improvement in earnings ($0.52 versus $0.25).

You can view the full analysis from the report here: Carmike Cinemas Ratings Report

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