Why Morgans Hotel Is Poised to Pull Back

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, hotel developer Morgans Hotel Group has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Morgans Hotel and see what CAPS investors are saying about the stock right now.

Morgans Hotel facts

  

Headquarters (founded)

New York, N.Y. (2005)

Market Cap

$203.1 million

Industry

Lodging

Trailing-12-Month Revenue

$189.9 million

Management

CEO Michael Gross

CFO Richard Szymanski

Return on Capital (average, past 3 years)

(1.2%)

Cash/Debt

$5.9 million/$538.1 million

Competitors

Boutique Hotels & Resorts International

Ian Schrager


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 40% of the 117 members who have rated Morgans Hotel believe the stock will underperform the S&P 500 going forward.

A couple of months ago, one of those Fools, All-Star NovaTodd, succinctly summed up the Morgans Hotel bear case for our community:

Sales per employee is a paltry $41,000, and these guys have not been FCF positive since 2005. Sales and Book Value have both been in decline since 2007, and the company carries $500 million in debt (more than two times TTM Revenue). It's hard to find anything to like with this one.

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The article Why Morgans Hotel Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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