Why Barnes & Noble, magicJack VocalTec, and Red Robin Gourmet Burgers Soared Today

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Today's relatively quiet trading in the stock market came as a relief to many investors who were unprepared for last week's volatility. But even though the broader market benchmarks had relatively small gains today, Barnes & Noble (NYSE: BKS  ) , magicJack VocalTec (NASDAQ: CALL  ) , and Red Robin Gourmet Burgers (NASDAQ: RRGB  ) weighed in with much bigger advances because of news that investors took as favorable for the companies and their future.

Barnes & Noble advanced 9% after reports surfaced claiming that the company had laid off hardware engineers in its Nook division. Even though the news essentially confirms that the Nook hasn't lived up to the potential of helping the bookseller compete with archrival Amazon.com (NASDAQ: AMZN  ) and its Kindle line of mobile devices, investors apparently believe that signs that Barnes & Noble is ready to move on and focus on other ways to try to drive growth in its core business are a positive for the stock's long-term value. Yet it's still unclear how Barnes & Noble can turn the tide of deep losses and become profitable in the long run.

For magicJack VocalTec, today's 18% jump came after prominent hedge-fund investor Whitney Tilson compared the tiny telecom company to Netflix (NASDAQ: NFLX  ) . Tilson believes that efforts to market its low-cost phone services could send the stock soaring in a similar way as Netflix has in recent years. The key for the company will be whether it can stop its recent drop in revenue and boost its customer counts enough to sustain and build on its profits. If it can start growing again, magicJack might have substantial upside.

Red Robin soared 13% after getting a favorable upgrade from analysts at Raymond James. With the restaurant chain scheduled to release earnings later this week, a combination of cost-cutting measures and smart marketing and renovation moves could reinvigorate the company's growth prospects. Even though the stock has been falling in recent months, Red Robin still has the ability to regain its former glory if it can win business from its competitors.

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  • Report this Comment On February 11, 2014, at 9:43 AM, lagunagreg wrote:

    I can't imagine anyone thinking, for more than 2 seconds together, that B$N will do anything but go down in the near future.

  • Report this Comment On February 12, 2014, at 1:32 PM, bensbubble wrote:

    Has Whitney Tilson used Magic Jack? What does he think of it personally? I would think that at least he would have tried it before pumping it. I suspect that Peter Lynch would have tried it, but in the New Paradigm the 1%-ers can't be bothered with minor details like this when they pump stocks.

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