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 are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 49.00 points (-0.3%) at 17,934 as of Wednesday, Dec. 31, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,635 issues advancing vs. 1,400 declining with 160 unchanged.

The Leisure industry as a whole closed the day up 0.1% versus the S&P 500, which was down 0.7%. Top gainers within the Leisure industry included Ark Restaurants ( ARKR), up 3.4%, Red Lion Hotels ( RLH), up 2.6%, Asia Entertainment & Resources ( IKGH), up 3.2%, Country Style Cooking Restaurant Chain Co L ( CCSC), up 5.9% and Flanigan's ( BDL), up 3.5%.

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 $0.04 (3.2%) to $1.29 on heavy volume. Throughout the day, 103,482 shares of Asia Entertainment & Resources exchanged hands as compared to its average daily volume of 60,700 shares. The stock ranged in a price between $1.22-$1.31 after having opened the day at $1.23 as compared to the previous trading day's close of $1.25.

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 $73.8 million and is part of the services sector. Shares are down 59.3% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates 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 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, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on IKGH go as follows:

  • IAO KUN GROUP HOLDING CO LTD 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 two years. We anticipate that this should continue in the coming year. During the past fiscal year, IAO KUN GROUP HOLDING CO LTD reported lower earnings of $0.12 versus $1.65 in the prior year. For the next year, the market is expecting a contraction of 50.0% in earnings ($0.06 versus $0.12).
  • 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 276.7% when compared to the same quarter one year ago, falling from $6.93 million to -$12.25 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, IAO KUN GROUP HOLDING CO LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $27.46 million or 27.26% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, IAO KUN GROUP HOLDING CO LTD has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 60.70%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 281.81% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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, Red Lion Hotels ( RLH) was up $0.16 (2.6%) to $6.31 on heavy volume. Throughout the day, 40,518 shares of Red Lion Hotels exchanged hands as compared to its average daily volume of 12,100 shares. The stock ranged in a price between $6.15-$6.32 after having opened the day at $6.15 as compared to the previous trading day's close of $6.15.

Red Lion Hotels Corporation, a hospitality and leisure company, owns, operates, and franchises hotels under its Red Lion Hotels, Red Lion Inns & Suites, and Leo Hotel Collection brands. It operates in three segments: Hotels, Franchise, and Entertainment. Red Lion Hotels has a market cap of $120.5 million and is part of the services sector. Shares are up 1.6% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Red Lion Hotels 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 Red Lion Hotels 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 increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins.

Highlights from TheStreet Ratings analysis on RLH go as follows:

  • The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, RLH has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • RED LION HOTELS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, RED LION HOTELS CORP continued to lose money by earning -$0.38 versus -$0.58 in the prior year.
  • Net operating cash flow has decreased to $7.04 million or 25.33% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, RED LION HOTELS CORP has marginally lower results.
  • In its most recent trading session, RLH has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

You can view the full analysis from the report here: Red Lion Hotels 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.

Ark Restaurants ( ARKR) was another company that pushed the Leisure industry higher today. Ark Restaurants was up $0.73 (3.4%) to $22.50 on heavy volume. Throughout the day, 3,818 shares of Ark Restaurants exchanged hands as compared to its average daily volume of 2,500 shares. The stock ranged in a price between $22.20-$22.50 after having opened the day at $22.22 as compared to the previous trading day's close of $21.77.

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. Ark Restaurants has a market cap of $74.2 million and is part of the services sector. Shares are up 2.0% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate Ark Restaurants a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Ark Restaurants as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on ARKR go as follows:

  • The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 57.5% when compared to the same quarter one year prior, rising from $1.45 million to $2.29 million.
  • ARK RESTAURANTS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, ARK RESTAURANTS CORP increased its bottom line by earning $1.43 versus $1.12 in the prior year.
  • The gross profit margin for ARK RESTAURANTS CORP is rather low; currently it is at 18.21%. Regardless of ARKR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.17% trails the industry average.
  • In its most recent trading session, ARKR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

You can view the full analysis from the report here: Ark 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.

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.

More from Markets

Trade War With China Won't Cure U.S. Trade Deficit, N.Y. Fed Note Says

Trade War With China Won't Cure U.S. Trade Deficit, N.Y. Fed Note Says

Bitcoin Falls but Trades Above $6,000

Bitcoin Falls but Trades Above $6,000

Turkey's Issues Are Likely to Keep a Ceiling on the S&P 500 of 2,850

Turkey's Issues Are Likely to Keep a Ceiling on the S&P 500 of 2,850

Tesla CEO Elon Musk Is Embarrassing the Short-Sellers

Tesla CEO Elon Musk Is Embarrassing the Short-Sellers

Is the S&P 500 Headed for a Bruising Double Top Reversal?

Is the S&P 500 Headed for a Bruising Double Top Reversal?