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Entertainment and lodging company, The Marcus Corp. (MCS - Snapshot Report) has approved an additional share repurchase of up to 3 million outstanding common shares of the company. The buyback will be made through open market operations and it has no expiration date.

The latest sanction expands the company’s existing share repurchase program that had approximately 955,000 shares remaining under prior authorizations as of December 31, 2012. According to the company, the new share repurchase program may be suspended, modified or discontinued at any time.

The Milwaukee-based company bought back around 1.8 million shares since June 1, 2012. During its recently concluded second-quarter fiscal 2013 earnings, Marcus repurchased 1.6 million shares. Cash and cash equivalents were $17.7 million at the end of the second quarter versus $12.4 million at the end of May 31, 2012.

We appreciate Marcus’s effort to bolster long-term shareholder value. We believe that the share repurchase authorization affirms the company’s positive outlook and reflects its confidence in its fundamentals.

At the same time, the share buyback will help the company reduce outstanding share count, thereby increasing earnings per share and return on equity. Apart from bolstering shareholder value, this strategic move lifts the relatively undervalued share price.

Besides its share repurchase program, the company has a regular dividend distribution program in place. Last month, the hotelier also approved a special dividend of $1.00 per share in anticipation of a dividend tax rate increase in 2013. Additionally, the company had brought forward the date of payment for the next two regular quarterly dividends.

Marcus currently carries a Zacks Rank #1 (Strong Buy). Besides Marcus, other hoteliers currently performing well include Choice Hotel International (CHH - Snapshot Report), and Orient-Express Hotels Ltd. (OEH - Snapshot Report). Both the companies carry a Zacks Rank #2 (Buy).

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