Interval Leisure Group, Inc. (IILG), Carnival Corporation (CCL): Recession and Vacation: The Leisure Industry

Today, International Speedway Corporation (NASDAQ:ISCA) continues to wrestle with a slow economy, customer’s reduced disposable income, tight competition from other sports events, and renewal of broadcasting rights. For a profitable future and sustainable business model, management needs to obtain important broadcasting contracts, complete the Daytona project, and hope for a quick economic recovery. Those catalysts will secure revenues and customers for the long-term.

International Speedway Corporation (NASDAQ:ISCA) is turning financially weaker by the day, as explained by this post. Revenue, net income, and cash flow describe a downward trend for the last five years. The good news is debt levels have also decreased during the same period, representing one-third of revenue and almost multiplying cash flow by four. Finally, operating margin has progressively declined during the last decade from 33% to 17%.

Currently trading at 26.7 times its earnings, slightly over the industry average, a yield of 0.64% and dividend of $0.20, and a price tag close to the 52-week high, the stock is fairly priced. It is recommended to hold because future profits have not been secured and risks associated with a long-term investment are high.

Time off

Out of the three stocks, International Speedway Corporation (NASDAQ:ISCA) was hit the hardest by the economic recession. Interval Leisure Group, Inc. (NASDAQ:IILG), on the other hand, has weathered headwinds very well. However, new acquisitions have questioned the model’s future prospects. Last, Carnival performed well amid market and non-market difficulties. Also, its operating margin remains above the industry average, and future prospects due to its advantageous market position.

Vanina Egea has no position in any stocks mentioned. The Motley Fool recommends International Speedway. The Motley Fool owns shares of International Speedway.

The article Recession and Vacation: The Leisure Industry originally appeared on Fool.com and is written by Vanina Egea.

Vanina is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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