NEW YORK (TheStreet) -- Shares of Caesars Entertainment Corp. are down by 3.76% to $13.31 in mid-morning trading on Monday, as the Wall Street Journal reports that a group of hedge funds filed papers on Monday to push the casino company's largest unit into bankruptcy in order to begin a planned restructuring. Caesar's second-lien bondholders have been arguing over how to handle the restructuring of Caesars Entertainment Operating Co., which said it will not be able to deal with the $18.4 billion debut it accumulated, the Journal added. The bondholders group filed an involuntary Chapter 11 petition, its reasoning being that the unit failed to pay the $225 million in interest that was due on $4.5 billion in second lien bonds in December. Exclusive Report: Jim Cramer's Best Stocks For 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Caesars told the Journal that the petition by "certain junior creditors" is "meritless." The company is preparing for a formal response. Separately, TheStreet Ratings team rates CAESARS ENTERTAINMENT CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: "We rate CAESARS ENTERTAINMENT CORP (CZR) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows: 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 decreased by 19.3% when compared to the same quarter one year ago, dropping from -$761.40 million to -$908.10 million. Net operating cash flow has significantly decreased to -$87.20 million or 288.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. Looking at the price performance of CZR's shares over the past 12 months, there is not much good news to report: the stock is down 38.60%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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. CAESARS ENTERTAINMENT CORP's earnings per share declined by 7.6% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CAESARS ENTERTAINMENT CORP reported poor results of -$21.43 versus -$11.12 in the prior year. This year, the market expects an improvement in earnings (-$4.70 versus -$21.43). The gross profit margin for CAESARS ENTERTAINMENT CORP is rather high; currently it is at 50.32%. Regardless of CZR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CZR's net profit margin of -41.04% significantly underperformed when compared to the industry average. You can view the full analysis from the report here: CZR 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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