Barnes & Noble, Inc. (NYSE:BKS)

Pockits (< 20) Submitted: 2/9/2012 10:00:12 AM : Start Price: $13.33 BKS Score: +31.46

There will always be a market for books. BKS is trusted, well established, and the only thing against them is their large scale retail operation (and their major competitor, AMZN). However, with momentum pointing to states requiring AMZN to collect sales tax, the competitive landscape levels off somewhat, and with AMZN making increasingly aggressive forays into their new role of publisher, they are creating significant friction inside the industry. If publishers turn against AMZN at all, BKS will be their go-to vendor. The scale of retail stores for BKS might have to change, but that takes less "agility" than people seem to think. It's not in the interest of any publisher to let BKS lose to AMZN. Borders was different--they had a long period of decline, which actually made it easier for publishers to absorb the resulting losses (not comfortable, but not a killing blow, either). I look at this as somewhat similar to the Ford/GM debacle a couple of years ago--F went way down because GM was failing, and they were muddled together in the eyes of most investors. But their businesses were different, and so were their products, at least to some degree. Same difference I see between BKS and the late great Borders.