Barnes & Noble (also known as BN) is an investment that you should stay away from. Last year Barnes & Noble made a bold move, moving it’s Nook out of its locations and into Walmart stores, but still the Nook has failed to meet the necessities it needs to take in order to save Barnes & Nobles. Now, yes the Nook is proven to have better features like it’s longer battery life and reader friendlier screen, along with other great selling points. Still, Barnes & Noble is still taking hits from Apple’s iPad and Amazon’s Kindle, who are the top competitors, and are drastically dominating the industry. In fact it is likely that Barnes & Noble will take the path of the Borders company and other book stores that had to surrender to the consumer changing market.
The fact that Barnes & Noble is still here, is a major statement itself. Just remember people will always need books, and students will always need what to study from, but the way they are getting it is not the same as it used to be. And the question lay, has Barnes & Noble stepped up their game yet?
Looking at the financial part of it and on the reports from Barnes and Noble’s q10 show cash flow from operations to have gone down. When the operations statement goes down, this is usually an indication of something that took a hit, and that the company is in deep trouble. This is without looking at it’s net loss, in fiscal 2011, and 2012. According to their annual reports, in their closing fiscal year the total sales were dropping until the great recession and the economy meltdown. Afterwards their total sales picked up from 5.8 million in 2010 to 7.1 in 2012, but this was largely due to the Nook series. And we can surely say, is this enough to carry themselves over?
Now they have had a run in the past with their Nook, but again that was not is. With the launch of competitors new products that came out and affected the sales of Barnes and Noble’s Nook, such as the iPad 3, Windows 8, and the iPhone 5, it is clear that the innovation and taste for the Nook is elsewhere.
Perhaps Barnes & Nobles needs to stop following and start leading. Look at the Amazon company that ran on a net loss through most of their years during the late 90’s. It is all about the hype, and like they say, stocks trade ahead of themselves, meaning if the investors see potential and life they will follow. Something we are just not seeing from Barnes & Noble.
In the past year the stock of Barnes & Noble has traded at a low of 12.59, and a high at just 23.71 which is does not entice consumers to invest, and investors to expect more. Not to mention their Market Cap floating at around 800 million, and their margin showing a -9.95% from this past year and a -12.19% within the last two.
It’s return has been pretty good so far this year, as compared to other companies, and it also has a debt to equity ratio better than Amazon, but still not enough to get them back to the peak. As it gets colder and the holiday season is here the demand for getting cozy with a book in the magnificent Barnes & Noble local stores should indicate that this time of year is its most successful, but it is what the investors are looking for? A case where a company is just holding on from it’s Christmas, and Hanukkah sales alone.
Companies online are striving and growing in the numbers day by day, and don’t have to worry about upkeep on hot spot locations. It goes without say that one of the biggest assets to the company, as expressed in the real estate world: location, location, location. Barnes & Noble has one of the prime hot spots of most areas that attracts and will always bring in its clientele, which is an essential reason of the business they do. If this continues to happen perhaps Barnes & Noble trade in for cheaper locations?
Barnes & Noble college bookstore partnerships, the division of Barnes & Noble that works with college campuses to get books to students, a business that brings in billions of their revenues will also be an unsustainable revenue as the shift to the online market buying is here. Barnes & Noble expressed in their annual report great aspects for the cornerstone of their industry, including a 1.1% increase in sales and opening of new locations to further their success, but is this where they should be innovating and putting their time into.
Today we need to buy a lot to educated and entertain ourselves. Barnes & Nobles was a place to educate and entertain ourselves, but will it be a thing of the past? As shows, it may be a safer investment to stay away from the bookstore, and invest elsewhere.
Kaufman, Leslie. “Barnes & Noble Weighs Its E-Reader Investment.” New York Times [NYC] 24 2 2013, n. pag. Web. 17 Dec. 2013. <http://nyti.ms/XQIU67>.
Moskowitz, Dan. “Buying Barnes & Noble’s Stock Here Be a Good Read?.” (2012): n. page. Print. <http://wallstcheatsheet.com/stocks/would-buying-barnes-nobles-stock-here-be-a-good-read.html/>.
“Barnes & Noble, Inc. (BKS) Yahoo Finance.” (Dec 1, 2011-Dec 1, 2013): n. page. Print. <http://finance.yahoo.com/echarts?s=BKS+Interactive#symbol=bks;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;>.
“BN Form 10-Q Quarterly Report.” (2013): n. page. Print. <http://forinvestors.barnesandnobleinc.com/secfiling.cfm?filingID=1193125-13-358093>
Barnes & Nobles, . “Barnes & Noble 2013 ANNUAL REPORT.” (2013): n. page. Web. 13 Nov. 2013. <http://www.barnesandnobleinc.com/for_investors/annual_reports/2013_bn_annual_report.pdf>.
Barnes & Nobles, . “Barnes & Noble 2012 ANNUAL REPORT.” (2012): n. page. Web. 13 Nov. 2013. <http://www.barnesandnobleinc.com/for_investors/annual_reports/2012_bn_annual_report.pdf>.
Amazon, “Amazon 1999 ANNUAL REPORT.” (1999): n. page. Web. 13 Nov 2013 <http://www.barnesandnobleinc.com/for_investors/annual_reports/2013_bn_annual_report.pdf>.
Barnes & Nobles, Inc. “ANNUAL REPORT TABLES” <http://www.barnesandnobleinc.com/for_investors/annual_reports/annual_reports.html>.