Whole Foods Market, Inc. (NASDAQ:WFM)

TMF1000 (99.78) Submitted: 6/6/2012 11:42:53 AM : Start Price: $14.88 WFM Score: +476.70

I first placed WFM on my Caps on 3/17/2009: The price was $15.34. It has since been a good caps selection and I also own the stock.

Today, it is $89, but I feel it has a lot of room to grow in the U.S and throughout the world.

Whole Foods Market still gets 96.9% of their sales from the U.S. The rest of their sales come from Canada and the UK, so they have plenty of room to grow overseas. They only have 307 stores in the U.S so there is room to grow here too. They estimate they can grow to 1,000 stores in the U.S. They have 324 global stores.

As always the PE ratio is on the high-side at 40.27, but it is one we believe will grow for many years. Today, they have no debt and $1.3 billion in cash, so they have wiped clean the debt that plagued them during the recession when they acquired Wild Oats.

Like HAIN, it is a good way to play the healthier eating trend. They were hurt in the last recession due to the Wild Oat acquisition and the FTC monopoly litigation. Those things are past them now, so I don't see them being hurt similarly by another recession.

But an interesting value point to note was the October 4, 2011 when the Dow fell from its then post recession high. The price of the stock was $53.32, the PE was 28.67. For them generate a similar PE ratio, the price would have to drop to $63.36. But it took a big drop in the Dow to get that value point. The Dow dropped from a high of 12,928 to 10,362 or about 19.8%. The Dow may not drop that low this year, but it is worth noting the value point regardless.