3 Stocks Advancing The Leisure Industry

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.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 78.22 points (-0.4%) at 17,774 as of Tuesday, Dec. 9, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,227 issues advancing vs. 1,763 declining with 144 unchanged.

The Leisure industry as a whole closed the day up 0.3% versus the S&P 500, which was down 0.2%. Top gainers within the Leisure industry included Dover Downs Gaming & Entertainment ( DDE), up 4.4%, Diversified Restaurant Holdings ( BAGR), up 5.3%, Lakes Entertainment ( LACO), up 3.3%, Marcus ( MCS), up 3.0% and Famous Dave's of America ( DAVE), up 1.6%.

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

Lakes Entertainment ( LACO) is one of the companies that pushed the Leisure industry higher today. Lakes Entertainment was up $0.22 (3.3%) to $6.85 on light volume. Throughout the day, 5,070 shares of Lakes Entertainment exchanged hands as compared to its average daily volume of 17,000 shares. The stock ranged in a price between $6.59-$6.87 after having opened the day at $6.59 as compared to the previous trading day's close of $6.63.

Lakes Entertainment, Inc. develops, finances, manages, and owns casino properties in the United States. Lakes Entertainment has a market cap of $91.3 million and is part of the services sector. Shares are down 13.7% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Lakes Entertainment 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 Lakes Entertainment 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from TheStreet Ratings analysis on LACO go as follows:

  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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 0.10 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 15.55, which clearly demonstrates the ability to cover short-term cash needs.
  • LAKES ENTERTAINMENT 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. 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, LAKES ENTERTAINMENT INC increased its bottom line by earning $1.40 versus $0.24 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 217.7% when compared to the same quarter one year ago, falling from $19.60 million to -$23.08 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, LAKES ENTERTAINMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.

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.

At the close, Diversified Restaurant Holdings ( BAGR) was up $0.25 (5.3%) to $4.95 on light volume. Throughout the day, 8,689 shares of Diversified Restaurant Holdings exchanged hands as compared to its average daily volume of 14,800 shares. The stock ranged in a price between $4.53-$4.99 after having opened the day at $4.55 as compared to the previous trading day's close of $4.70.

Diversified Restaurant Holdings has a market cap of $126.5 million and is part of the services sector. Shares are up 1.3% year-to-date as of the close of trading on Monday.

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

Dover Downs Gaming & Entertainment ( DDE) was another company that pushed the Leisure industry higher today. Dover Downs Gaming & Entertainment was up $0.04 (4.4%) to $0.92 on light volume. Throughout the day, 21,507 shares of Dover Downs Gaming & Entertainment exchanged hands as compared to its average daily volume of 44,900 shares. The stock ranged in a price between $0.91-$1.03 after having opened the day at $1.02 as compared to the previous trading day's close of $0.88.

Dover Downs Gaming & Entertainment, Inc., together with its subsidiaries, operates as a gaming and entertainment resort destination in the United States. Dover Downs Gaming & Entertainment has a market cap of $18.8 million and is part of the services sector. Shares are down 40.5% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Dover Downs Gaming & Entertainment a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Dover Downs Gaming & Entertainment as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and poor profit margins.

Highlights from TheStreet Ratings analysis on DDE go as follows:

  • 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, DOVER DOWNS GAMING & ENTMT's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for DOVER DOWNS GAMING & ENTMT is currently extremely low, coming in at 10.61%. Regardless of DDE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DDE's net profit margin of 1.45% is significantly lower than the industry average.
  • DOVER DOWNS GAMING & ENTMT reported significant earnings per share improvement 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, DOVER DOWNS GAMING & ENTMT reported lower earnings of $0.01 versus $0.15 in the prior year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.36 is very weak and demonstrates a lack of ability to pay short-term obligations.

You can view the full analysis from the report here: Dover Downs Gaming & 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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