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Yahoo
09-06-2025
- Business
- Yahoo
Barnes & Noble Education, Inc. (BNED): A Bear Case Theory
We came across a bearish thesis on Barnes & Noble Education, Inc. (BNED) on Monopolistic Investor's Substack by Antoni Nabzdyk. In this article, we will summarize the bears' thesis on BNED. Barnes & Noble Education, Inc. (BNED)'s share was trading at $11.82 as of 4th June. An aerial view of a well-stocked bookstore, with customers browsing inside. Barnes & Noble Education (BNED) operates at the intersection of traditional academia and retail, providing textbooks—both digital and physical—while also managing campus bookstores across educational institutions. Its model, though well-entrenched within a regulated education system, faces mounting pressures from evolving technology and shifting student preferences. While AI-powered learning alternatives like Duolingo pose a long-term threat, the structural inertia in education ensures textbooks remain mandatory for now. More pressing is the competitive threat from Amazon, which offers direct textbook purchases, eroding BNED's intermediary role and highlighting the company's lack of pricing power. Students, constrained by affordability, routinely compare prices or opt for used books, which has led BNED to build a student trading platform, yet this only reinforces the commoditized nature of its core product. BNED's dependence on third-party suppliers adds vulnerability, as nearly 28% of its inventory is externally sourced. Despite these challenges, its access to the college demographic provides marketing partnerships with brands like DoorDash and Dell, and its campus stores benefit from sales of custom school merchandise and branded apparel. The company also generates revenue through NOOK e-readers, merchandise, Starbucks cafés, self-publishing, and memberships. However, BNED remains financially weak: it has negative net margins, thin operating profits, and inconsistent revenue driven by academic cycles. While it maintains a positive net equity position, its debt load and structurally uncompetitive metrics underscore a business in decline. With stagnant projected growth and few signs of meaningful turnaround, BNED appears poorly positioned in an industry facing long-term disruption, making it an unattractive investment prospect. We previously covered a on Barnes & Noble Education (BNED) by Catapult Capital on Substack in March 2024, which highlighted the transformative potential of Equitable Access programs, improving margins, and resolution of regulatory and debt overhangs. While the stock has appreciated by approximately 21% since then, Monopolistic Investor's recent bearish take contrasts sharply, emphasizing BNED's structural weaknesses, thin margins, and susceptibility to competition and disruption, raising doubts about the sustainability of its turnaround. Barnes & Noble Education, Inc. (BNED) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held BNED at the end of the first quarter which was 17 in the previous quarter. While we acknowledge the risk and potential of BNED as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
30-05-2025
- Business
- Yahoo
ASML Holding N.V. (ASML): A Bull Case Theory
We came across a bullish thesis on ASML Holding N.V. (ASML) on Monopolistic Investor's Substack. In this article, we will summarize the bulls' thesis on ASML. ASML Holding N.V. (ASML)'s share was trading at $746.51 as of 28th May. ASML's trailing and forward P/E were 29.62 and 27.47 respectively according to Yahoo Finance. Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process. ASML, a Dutch company, plays a critical but often understated role in the semiconductor industry by producing the highly complex extreme ultraviolet (EUV) lithography machines essential for manufacturing the world's most advanced chips. Its technology works by generating EUV light through an intricate process involving vaporized tin droplets and lasers inside a vacuum chamber, with precision-engineered multilayer mirrors and reticles transferring chip patterns onto silicon wafers with extraordinary accuracy. The company's machines operate with near-perfect environmental controls, managing temperature within thousandths of a degree and positioning wafers with micrometer precision, reflecting an unparalleled level of engineering sophistication that is extremely difficult for competitors to replicate. Despite holding significant pricing power, ASML chooses not to excessively raise prices, balancing profitability with the broader goal of supporting ongoing research and innovation in the tech ecosystem, maintaining around 50% gross margins. The Dutch government recognizes ASML's strategic importance and supports its growth through initiatives like Project Beethoven, aimed at expanding infrastructure and preserving jobs domestically as ASML expands globally. This combination of technological leadership, prudent pricing, and strong governmental backing positions ASML as a vital, resilient player in the semiconductor supply chain, underpinning the future of advanced computing technologies. Previously, we have covered ASML Holdings N.V. (ASML) in May 2025 wherein we summarized a bullish thesis by FluentInQuality on Substack. The author highlighted the company as the sole global provider of extreme ultraviolet (EUV) lithography machines, essential for producing the world's most advanced semiconductors. It emphasized ASML's unmatched technological moat, strong financials with high margins and return on invested capital, and significant geopolitical importance, positioning the company as a critical bottleneck in the semiconductor supply chain. Since our last coverage, the stock is up 10.96%. ASML Holding N.V. (ASML) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 80 hedge fund portfolios held ASML at the end of the first quarter which was 86 in the previous quarter. While we acknowledge the risk and potential of ASML as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ASML but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
