Books-A-Million, Inc. (BAMM)
The Company and its subsidiaries are principally engaged in the sale of books, magazines and related items through a chain of retail bookstores. It operates two reportable segments: retail trade and electronic commerce trade.
Recs
The consumer will return eventually, buoying this stock.
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As the competition continues to thin out, BAMM is making the right moves and not overextending themselves. Solid financials should also keep the stock from falling further, and you get paid 4+% while waiting for rebound.
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My parents love this store.
It'll be a long time before internet causes bookstores like this to go out of business. In the meantime, this one beats the others hands down in the heartland.
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Well managed in competitive industry and do not try and overreach their mark.
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I like to read and I like sipping coffee in bookstores leafing through interesting tomes, but I don't like Books-A-Million's branches and their selection doesn't impress me.
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Will take market share away from Borders (but not Barnes and Noble) with good gross margins and lean operations, simple business structure.
Book stores are really book/coffee houses these days, and they can survive just fine, granted they need to control costs and innovate.
BAMM is cheap here, I'd buy up to $15.
Recs
CFO buying
Recs
Driven by an improving media environment which is highlighted by recent Oprah's endorsement of The Secret, Books-A-Million is showing signs of improvement. Company’s several categories performed well in recent past with new age, teen, graphic novels and hardcover fiction showing particular strength.
Net sales for the recent quarter surged by 2.1% to $116.3 million, but comparable store sales weakened by 0.5%, which is still an improvement over the fourth quarter. Net profit rose by 40% to $2.11 million on account of leveraging of cost of sales, selling and administrative expenses, lower depreciation charges in addition to interest income. Besides the management has declared a regular quarterly cash dividend of $0.09, which ensures its concern in regard to shareholder’s wealth creation.
The company recently reported opening of a location in Colonial Pinnacle Craft Farms in Gulf Shores, Alabama, and a location in Colonial Promenade in Fultondale, Alabama. This will help the company to expand its operation and thereby support the top-line. The nation’s leading book retailers did not provide any guidance for the future but as it enters the second quarter, it expects a strong summer movie lineup as well as the publication of Harry Potter and The Deathly Hallows. Its recent performance has not been very convincing and has already hampered the share price significantly. Its price to earning multiple is way below the industry level which proves that the prior results are already discounted and the company can now look forward to the future and reap the sowings.
Recs
Rapid expansion in the midst of a deteriorating economics in the retail books industry as well as a high dividend yield (2.1%) will turn free cash flow to negative.
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Off-line media retail will continue to suffer as more and more sales goes on-line.
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IBD 10/23/2006
"2% above 18.88 buy point after clearing cup base."
OVERALL: 98
Earnings Per Share (EPS) Rating
98
Relative Price Strength (RS) Rating
89
Industry Group Relative Strength (Grp RS) Rating
A-
Sales + Profit Margins + ROE (SMR) Rating
A
Accumulation/ Distribution (Acc/Dis) Rating
B
Recs
Great Book Company with room to grow. Great prices, once you go there, Amazon, B&N will be a thing of the past.
ROA and ROE still growing.
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Compared to the other two large book chains, Barnes & Noble and Borders, I beleive BAMM is undervalued. The company has consistently delivered positive results over the last few years and I think the trend will continue.
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This is a tough sector but a good company. This is one of my Peter Lynch picks. I shop here because it has good price and service so I think the stock is worth watching long term

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