Here’s the Barnes & Noble Hype

Barnes & Noble (NYSE:BKS) closed up 7.5 percent October 8. Credit may fall to CEO William Lynch, who appeared on CNBC and fired up excitement for the company’s new Nook Media venture.

Lynch said in the interview that “by any measure, we think the company is undervalued.” Barnes & Noble has a market cap of only $822 million, but recently spun off Nook Media with a $300 million investment from Microsoft (NASDAQ:MSFT) for a 17.6 percent stake. That gives the division a $1.7 billion post-money valuation.

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The company recently announced new Nook devices that are set to enter an increasingly competitive tablet market. Apple (NASDAQ:AAPL), already the most popular tablet, is rumored to be releasing an iPad Mini, and Google’s (NASDAQ:GOOG) market share is growing with its own content channels. Despite this, Lynch told CNBC, “With Nook HD and Nook HD Plus, we launched the two best products ever created for reading.” He added, “we’re seeing pre-orders at the highest levels we’ve ever had for Nook.”

Amazon (NASDAQ:AMZN) remains the book retailer’s nemesis. The companies have been sparring over both print and digital distribution channel and the pricing models for e-books. Barnes & Noble has stopped carrying Amazon Publishing titles in its stores. One thing the Nook will have over Amazon is access to popular physical retail outlets. Both Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) will not be selling the Kindle Fire line, but will sell the new Nooks.

“Publishers are really interested in seeing Barnes & Noble do well,” Lynch told CNBC in response to a question about Amazon’s e-book pricing. He added, “we feel great that retail will remain vibrant and profitable for the foreseeable future.”

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