3 Stocks Pushing The Leisure 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 Leisure industry as a whole closed the day down 0.6% versus the S&P 500, which was up 0.2%. Laggards within the Leisure industry included Dover Motorsports ( DVD), down 3.4%, Ark Restaurants ( ARKR), down 3.7%, Asia Entertainment & Resources ( IKGH), down 1.7%, Frisch's Restaurants ( FRS), down 4.5% and Century Casinos ( CNTY), down 2.5%.

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

Asia Entertainment & Resources ( IKGH) is one of the companies that pushed the Leisure industry lower today. Asia Entertainment & Resources was down $0.02 (1.7%) to $1.15 on light volume. Throughout the day, 11,701 shares of Asia Entertainment & Resources exchanged hands as compared to its average daily volume of 54,500 shares. The stock ranged in price between $1.13-$1.17 after having opened the day at $1.13 as compared to the previous trading day's close of $1.17.

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 $70.7 million and is part of the services sector. Shares are down 10.7% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Asia Entertainment & Resources a buy, no analysts rate it a sell, and none rate it a hold.

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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 63.20%, 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, Ark Restaurants ( ARKR) was down $0.91 (3.7%) to $23.80 on average volume. Throughout the day, 2,029 shares of Ark Restaurants exchanged hands as compared to its average daily volume of 2,500 shares. The stock ranged in price between $23.80-$24.47 after having opened the day at $24.47 as compared to the previous trading day's close of $24.71.

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. Ark Restaurants has a market cap of $83.5 million and is part of the services sector. Shares are up 9.7% year-to-date as of the close of trading on Friday.

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TheStreet Ratings rates Ark Restaurants as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on ARKR go as follows:

  • The revenue growth came in higher than the industry average of 9.6%. 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.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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.

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.

Dover Motorsports ( DVD) was another company that pushed the Leisure industry lower today. Dover Motorsports was down $0.09 (3.4%) to $2.54 on light volume. Throughout the day, 1,590 shares of Dover Motorsports exchanged hands as compared to its average daily volume of 7,200 shares. The stock ranged in price between $2.44-$2.58 after having opened the day at $2.58 as compared to the previous trading day's close of $2.63.

Dover Motorsports, Inc., through its subsidiaries, markets and promotes motorsports entertainment in the United States. The company promotes events under the auspices of the sanctioning body in motorsports, the National Association for Stock Car Auto Racing. Dover Motorsports has a market cap of $47.6 million and is part of the services sector. Shares are up 0.8% year-to-date as of the close of trading on Friday. Currently there is 1 analyst who rates Dover Motorsports a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Dover Motorsports as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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

Highlights from TheStreet Ratings analysis on DVD go as follows:

  • DVD's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
  • 35.42% is the gross profit margin for DOVER MOTORSPORTS INC which we consider to be strong. Regardless of DVD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.34% trails the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, DOVER MOTORSPORTS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $3.38 million or 41.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

You can view the full analysis from the report here: Dover Motorsports 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.

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