2-Star Stocks Poised to Plunge: Barnes & Noble?

By Brian D. Pacampara
July 9, 2009 | Comments (2)

Recs

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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, book retailer Barnes & Noble (NYSE: BKS) has received a distressing two-star ranking.

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

Barnes & Noble facts

Headquarters (founded)

New York, N.Y. (1986)

Market Cap

$1.14 billion

Industry

Specialty stores

TTM Revenue

$5.07 billion

Management

Founder/Chairman Leonard Riggio
CEO Stephen Riggio

Compound Annual Revenue and Net Income Growth (over last three years)

(0.3%) and (19.9%)

Competitors

Borders Group (NYSE: BGP)
Amazon.com (Nasdaq: AMZN)

CAPS members bearish on BKS also bearish on

Sears Holdings (Nasdaq: SHLD)
Citigroup (NYSE: C)

CAPS members bullish on BKS also bullish on

Apple (Nasdaq: AAPL)
Google (Nasdaq: GOOG)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 82 of the 284 members who have rated Barnes & Noble -- some 29% -- believe the stock will underperform the S&P 500 going forward. These bears include AnnaDcc and All-Star jstegma, who is ranked in the top 0.2% of our community.

Just two days ago, AnnaDcc helped Fools read into the simple situation: "Book stores are being phased out (particularly overpriced ones) in favor of electronic alternatives & web-based book stores."

In an earlier pitch from May, jstegma also threw the bearish book at Barnes & Noble:

I rarely shop there. That might not be a fair assessment because I would describe myself as "functionally illiterate" … I don't read books on a regular basis. But at the same time, when things get a little tough, buying new books is something easy to cut. Used books, re-reading your old books, going to the library, borrowing books from friends, etc. Plenty of way to avoid becoming "functionally illiterate" like me without buying new books.

What do you think about Barnes & Noble, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Amazon and Apple are Motley Fool Stock Advisor picks. Sears Holdings is an Inside Value choice. Google is a recommendation of Rule Breakers. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 09, 2009, at 10:39 AM, Bamafan68 wrote:

    I am a huge reader, so I have kept the local B&N in business for the past several years. My routine was to hit the bookstore several times a week. Since purchasing my Amazon Kindle, I have been in B&N once in the past 6 weeks. If a hard core patron such as myself can abandon them, I'd have to say B&N's long term prospects are bleak.

  • Report this Comment On July 09, 2009, at 10:49 AM, StockTradersBlog wrote:

    The market is turn bearish lately I believe bearish sentiment will continue for a while and barnes and noble is very good defensive stock. I don't find CAP's prediction is good indicator

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Related Tickers

11/6/2009 4:03 PM
BGP $2.06 Down -0.05 -2.37%
Borders Group, Inc… CAPS Rating: *
AAPL $194.34 Up +0.31 +0.16%
Apple, Inc. CAPS Rating: ***
GOOG $551.10 Up +2.45 +0.45%
Google, Inc. CAPS Rating: ***
C $4.06 Down +0.00 +0.00%
Citigroup, Inc. CAPS Rating: **
AMZN $126.20 Up +5.59 +4.63%
Amazon.com, Inc. CAPS Rating: **
SHLD $67.65 Up +0.76 +1.14%
Sears Holdings Cor… CAPS Rating: **
BKS $17.05 Up +0.18 +1.07%
Barnes & Noble, In… CAPS Rating: **

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