Why Scholastic Is Set to Slide in 2013

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, children's publishing and education company Scholastic has received an alarming one-star ranking.

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

Scholastic facts

Headquarters (founded)

New York (1920)

Market Cap

$907.4 million

Industry

Publishing

Trailing-12-Month Revenue

$2.1 billion

Management

Chairman/CEO Richard Robinson
CFO Maureen O'Connell

Return on Equity (average, past 3 years)

9%

Cash/Debt

$193.1 million / $210.9 million

Dividend Yield

1.7%

Competitors

McGraw-Hill Companies
Pearson
Random House


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

On CAPS, 33% of the 106 members who have rated Scholastic believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, JohnStuartMill, succinctly summed up the Scholastic bear case for our community:

The publishing industry will continue its gradual slide down. [Scholastic] will lead the pack down with its recent cut in fiscal guidance. Cost cutting will help some, but it still leaves you with a diminished corporation. Cost cutting is targeted at [$20M] to [$30M]. This is all to meet the current revised fiscal guidance. However, I do like the fact they have agreed to withhold management bonuses for fiscal 2013 (but I'll believe it when I see it).

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The article Why Scholastic Is Set to Slide in 2013 originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of The McGraw-Hill Companies. 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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