International Speedway Corporation Stock Downgraded (ISCA)

NEW YORK ( TheStreet) -- International Speedway Corporation (Nasdaq: ISCA) has been downgraded by TheStreet Ratings from buy to 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • ISCA's debt-to-equity ratio is very low at 0.28 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 1.39, which illustrates the ability to avoid short-term cash problems.
  • INTL SPEEDWAY CORP's earnings per share declined by 17.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTL SPEEDWAY CORP increased its bottom line by earning $1.46 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $1.46).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, ISCA has underperformed the S&P 500 Index, declining 14.95% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Hotels, Restaurants & Leisure industry average. The net income has decreased by 20.0% when compared to the same quarter one year ago, dropping from $21.44 million to $17.14 million.

International Speedway Corporation, together with its subsidiaries, promotes motorsports themed entertainment activities in the United States. The company's motorsports themed event operations consist of racing events at its motorsports entertainment facilities. The company has a P/E ratio of 17.2, equal to the average leisure industry P/E ratio and below the S&P 500 P/E ratio of 17.7. International Speedway has a market cap of $619.1 million and is part of the services sector and leisure industry. Shares are down 6.2% year to date as of the close of trading on Tuesday.

You can view the full International Speedway Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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