Should You Consider Investing in Barnes & Noble Education (BNED)?

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Greenhaven Road Capital, an investment management company, released its first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 17% in the first quarter. Even though fears of runaway inflation waned in the quarter, investors’ concerns relating to the macroeconomic factors weren’t fully eliminated.  In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Greenhaven Road Capital highlighted stocks like Barnes & Noble Education, Inc. (NYSE:BNED) in the first quarter 2023 investor letter. Headquartered in Basking Ridge, New Jersey, Barnes & Noble Education, Inc. (NYSE:BNED) manages and operates bookstore chains in universities. On May 19, 2023, Barnes & Noble Education, Inc. (NYSE:BNED) stock closed at $1.4100 per share. One-month return of Barnes & Noble Education, Inc. (NYSE:BNED) was -4.08%, and its shares lost 35.91% of their value over the last 52 weeks. Barnes & Noble Education, Inc. (NYSE:BNED) has a market capitalization of $74.172 million.

Greenhaven Road Capital made the following comment about Barnes & Noble Education, Inc. (NYSE:BNED) in its Q1 2023 investor letter:

Barnes & Noble Education, Inc. (NYSE:BNED) – Retailing tends to be a bad business. While there are exceptions such as Walmart, which benefits from scale and local monopolies, retailers are not particularly durable. Barnes and Noble Education operates college bookstores. In the 1990s, this was a good business but today it is not. College students increasingly buy their books from other sources such as Amazon, use pirated PDFs from dubious websites, or do not procure books at all for cost or logistical reasons. The combination of declining enrollments and declining rates of book purchases has decimated the company’s earnings and effectively made it a nonprofit today, operating 793 physical bookstores and 606 virtual bookstores serving 6M students, generating $1.5B in revenue… and no profits.

Why did we invest incremental capital into Barnes and Noble Education this past quarter? The short answer is that they are likely to be a much more durable business in two years. Why? How? Four years ago, they launched First Day Complete, a program where they partner with schools and publishers to provide all of a student’s books (physical and digital) billed directly through the school. Because of publisher discounts, students save 30-50%, schools receive a commission on the book sales, and publishers are actually paid for their products. It’s a win-win-win…” (Click here to read the full text)

Barnes & Noble Education, Inc. (NYSE:BNED) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Barnes & Noble Education, Inc. (NYSE:BNED) at the end of the fourth quarter which was 18 in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.