Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, book retailer Barnes & Noble (NYSE: BKS) has received the dreaded one-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 City (1986)

Market Cap

$851.1 million


Specialty stores

Trailing-12-Month Revenue

$5.8 billion


CEO William Lynch Jr. (since March 2010)
CFO Joseph Lombardi (since May 2003)

Trailing-12-Month Return on Equity



$61 million / $510.4 million

1-Year Return


Competitors (Nasdaq: AMZN)
Apple (Nasdaq: AAPL)
Borders Group (NYSE: BGP)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 34.5% of the 426 members who have rated Barnes & Noble believe the stock will underperform the S&P 500 going forward. These bears include Millsteen and All-Star HollywoodDan, who is ranked in the top 10% of our community.

Late last month, Millsteen urged Fools to throw the book at Barnes & Noble: 

Analog business in a digital age. The way CDs went to ipod, books will go to ipad or any other digital reading device. There's very little customer traffic [in those] high rent enormous superstores that was once a weekend destination.

The secular trend away from print continues to fuel our community's lack of love for Barnes & Noble. The big-box bookseller may own the operational edge over fellow book superstore Borders, but many Fools think the growth of digital e-readers and e-books are just too powerful for the company to stay relevant. While Barnes & Noble's own digital alternative, the Nook, certainly sports some positives, it's still way behind Amazon's Kindle and Apple's iPad in terms of sales.

To be sure, Barnes & Noble's recent decision to put itself up for sale gives the stock a possible positive catalyst, going forward. However, CAPS All-Stars like HollywoodDan remain highly skeptical about how much value the company has to offer in the first place:

I can't fathom them doing anything useful with the stores and think e-books are raging in faster than I thought they would. They would have to close all their stores and try to compete with Amazon, which they can't do. It's too late. I think they are not going to exist in 5 years or if they do, it will be as a much smaller entity. Blockbuster can't keep open smaller stores, how will [Barnes & Noble] pay for all of these expensive "super stores."

What do you think about Barnes & Noble, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Amazon and Apple are Motley Fool Stock Advisor selections. The Fool's disclosure policy always gets a perfect score.