International Speedway Corporation (NASDAQ:ISCA), which is in the hospitality business, and is based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $45.05 and falling to the lows of $35.18. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether International Speedway’s current trading price of $38.05 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at International Speedway’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in International Speedway?Great news for investors – International Speedway is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $47.97, but it is currently trading at US$38.05 on the share market, meaning that there is still an opportunity to buy now. However, given that International Speedway’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of International Speedway look like?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for International Speedway, at least in the near future.
What this means for you:
Are you a shareholder? Although ISCA is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to ISCA, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on ISCA for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on International Speedway. You can find everything you need to know about International Speedway in the latest infographic research report. If you are no longer interested in International Speedway, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.