November 7, 2011

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Not the Best Nook

Despite New E-Reader, ValuEngine Rates Barnes and Noble a HOLD
Barnes & Noble, Inc. is engaged in the retail sale of trade books (generally hardcover and paperback consumer titles, excluding educational textbooks and specialized religious titles), mass market paperbacks (such as mystery, romance, science fiction and other popular fiction), children's books, off-price bargain books and magazines. These collectively account for substantially all of the company's bookstore sales. Bestsellers represent only a small portion of the Barnes & Noble store sales. The company announced the latest addition to its Nook line of e-readers today, the Nook Tablet. This device is designed to compete with the Apple iPad and the Amazon Kindle Fire readers/tablets. It remains to be seen is this new device will allow Barnes and Noble to recover from its long price slide. The stock once traded for more than $45 on an adjusted basis but lately has been stuck in the $10-$13 range. ValuEngine has issued a HOLD recommendation for BARNES & NOBLE on Nov. 07, 2011. Based on the information we have gathered and our resulting research, we feel that BARNES & NOBLE has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE price/sales ratio and expected EPS growth, but UNATTRACTIVE P/E ratio. Based on available data as of Nov. 07, 2011, we believe that BKS should be trading at $15.16. This makes BKS 23.44% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly

efficient and everything traded at its true worth. For BKS, we base this on actual earnings per share (EPS) for the previous four quarters of -$0.94, forecasted EPS for the next four quarters of $0.09, and correlations to the 30- year Treasury bond yield of 3.10%.
ValuEngine Forecast
Target Price* 1-Month 3-Month 6-Month 1-Year 2-Year 3-Year 11.64 11.71 11.76 11.85 11.38 10.91 Expected Return 0.28% 0.83% 1.31% 2.07% -1.95% -6.00%

Valuation & Rankings

Valuation 1-M Forecast Return 12-M Return Sharpe Ratio 5-Y Avg Annual Return Volatility Expected EPS Growth Market Cap (billions) Trailing P/E Ratio Forward P/E Ratio PEG Ratio Price/Sales Market/Book Beta Alpha 23.44% undervalued 0.28% n/a -0.43 -24.75% 57.40% 109.81% 0.70 n/a 125.51 n/a 0.10 0.91 1.09 n/a Valuation Rank 1-M Forecast Return Rank Momentum Rank Sharpe Ratio Rank 5-Y Avg Annual Rtn Rank Volatility Rank EPS Growth Rank Size Rank Trailing P/E Rank Forward P/E Ratio Rank PEG Ratio Rank Price/Sales Rank Market/Book Rank Beta Rank Alpha Rank 53 n/a 76 2 n/a 96 17 61 n/a 23 23 40 86 47 65

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ValuEngine Market Overview

Summary of VE Stock Universe
Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 91.89% 8.11% 70.66% 3.11%

ValuEngine Sector Overview

Sector
Utilities Consumer Staples Retail-Wholesale Aerospace Multi-Sector Conglomerates Finance Business Services Transportation Consumer Discretionary Computer and Technology Medical Industrial Products Construction Auto-Tires-Trucks Basic Materials Oils-Energy

Change
1.90% 1.61% 3.50% 2.56% 2.46% 3.53% 3.69% 3.28% 2.74% 3.78% 1.88% 3.38% 3.86% 5.47% 1.27% 3.10%

MTD
2.04% 1.91% 3.96% 2.88% 2.74% 3.95% 4.13% 3.70% 3.15% 4.29% 2.20% 3.81% 4.26% 6.08% 1.56% 3.58%

YTD
-8.52% -20.87% -9.67% 0.01% -22.79% -17.20% -14.30% -23.97% -21.01% -17.86% -11.10% -24.68% -31.99% -37.32% -31.08% -28.97%

Valuation
14.90% undervalued 24.35% undervalued 25.17% undervalued 27.40% undervalued 27.65% undervalued 28.11% undervalued 28.42% undervalued 30.45% undervalued 31.82% undervalued 32.28% undervalued 33.01% undervalued 34.16% undervalued 36.04% undervalued 36.49% undervalued 37.64% undervalued 37.83% undervalued

Last 12- P/E MReturn Ratio

-0.19% -3.71% 6.27% 0.37% -5.35% -7.79% -4.70% -7.52% -6.59% -6.38% -2.11% -2.55% -19.96% -5.56% -5.36% -5.20% 22.96 15.33 23.18 16.05 20.00 22.67 34.97 18.86 22.94 30.84 23.96 20.19 33.74 15.49 27.00 31.06