Barnes & Noble's Shares Surged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of bookstore chain Barnes & Noble (NYS: BKS) jumped as high as 10% today on more than five times their average trading volume -- but then fell back to a 1.7% gain that underperformed the Dow Jones (INDEX: ^DJI) index.

So what: A CNBC show highlighted the bookseller's recent market run this morning while presenting the Nook series as a serious rival to the (NAS: AMZN) Kindle line. That media-fueled enthusiasm evaporated later on, when the same cable channel also noted that Apple (NAS: AAPL) fever is running rampant in Hong Kong and elsewhere.

Now what: The truth, of course, lies between these extreme highs and lows. The basic Kindle and Nook models provide a simpler experience that even Apple's mighty supply chains can't price-match. The Nook Tablet and Kindle Fire, on the other hand, are perhaps the first truly compelling non-Apple tablets on the market at competitive price points. A lot of the Nook's promise has already been priced into Barnes & Noble at this point, but the stock is still cheap by many traditional retail metrics. Buying here wouldn't be a huge mistake, mostly thanks to a digital strategy that Borders and Books-a-Million never could match. May they rest in pieces.

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At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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