Trade-Ideas: Melco Crown Entertainment (MPEL) Is Today's Post-Market Laggard Stock

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.

Trade-Ideas LLC identified Melco Crown Entertainment ( MPEL) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Melco Crown Entertainment as such a stock due to the following factors:

  • MPEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $82.8 million.
  • MPEL is down 2.1% today from today's close.

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More details on MPEL:

Melco Crown Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment resort facilities in Asia. The stock currently has a dividend yield of 1.1%. MPEL has a PE ratio of 21.1. Currently there are 9 analysts that rate Melco Crown Entertainment a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Melco Crown Entertainment has been 4.4 million shares per day over the past 30 days. Melco Crown Entertainment has a market cap of $13.3 billion and is part of the services sector and leisure industry. Shares are down 38.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Melco Crown Entertainment as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, MELCO CROWN ENTMT LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • MELCO CROWN ENTMT LTD's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MELCO CROWN ENTMT LTD increased its bottom line by earning $1.15 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($1.28 versus $1.15).
  • MPEL, with its decline in revenue, slightly underperformed the industry average of 9.4%. Since the same quarter one year prior, revenues fell by 10.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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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