Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

BKS – Buying Opportunity in Barnes & Noble

|Includes:Amazon.com, Inc. (AMZN), BKS

The last few day’s BKS has been getting killed after a light earnings report.  The stock closed today at 12.70 after being as high as $18.90 a few weeks ago.  I had forgotten about BKS as it had fallen out of grace and Betty sold the top in her PA, but, an interesting article today sparked my interest in the stock again:

As the exclusive provider of wireless service for the Kindle in the U.S., AT&T will offer the device beginning March 6 for $189, the same price charged by Amazon. Dallas-based AT&T won’t sell the cheaper Wi-Fi only version of the Kindle.

AT&T is promoting tablets, such as the Apple Inc. iPad, to generate revenue from sources other than mobile-phone contracts. The carrier may collect $3 to $4 a month from Seattle-based Amazon per each Kindle connected to its network, estimates Philip Cusick, a JPMorgan & Chase Co. analyst in New York.

“We believe we should have in our stores devices that we connect, whether it has our brand on it or not,” Glenn Lurie, AT&T’s emerging device president, said in an interview. “We think we’ll sell a few; it helps Amazon, it helps us.”

The Kindle accounted for 5 percent of Amazon’s revenue in 2010, according to Aaron Kessler, an analyst at ThinkEquity LLC. The company may have sold more than 8 million of the devices in 2010, two people familiar with the matter said in December. Amazon doesn’t disclose Kindle sales.

With the kindle driving 5% of Amazon’s sales and AT&T starting to push Kindle in their stores I started thinking what could be the next move and who would benefit?   Right now AT&T a few tablets all of which are in the upper echelon of pricing and the Kindle will be the first tablet with a price tag similar to a  Smartphone.  A few month’s ago Dean got a look at BKS’ reader/tablet, the Nook Color and couldn’t believe they could make such a quality product and I second his opinion.  You can now get the Nook Color for $200 which is undercutting the competition of Apple, Motorola, and Samsung substantially and is what I think will take to compete with the big players. 

So, lets get to the point – I think its about time to start accumulating a position in BKS, it could be a rocky road but the names gotten killed and I think people have lost touch of the growth in the Nook and the BKS Library.  I also believe if AT&T is going to start offering the Kindle in stores I could see them offering the Nook Color in stores sooner than later and this could result in a nice catalyst for the name to start making it’s move back towards the $19 highs.   Lastly, take a look at the chart below, if you have any believe in the company you have to like the support at $12.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Stocks: AMZN, BKS