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 (NASDAQ: SCHL  ) 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 (NYSE: MHFI  )
Pearson (NYSE: PSO  )
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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