Whole Foods Market, Inc. (NASDAQ:WFM)

CAPS Rating: 4 out of 5

Whole Foods brings the world of natural and organic foods into the supermarket format.


Player Avatar LouPinella (< 20) Submitted: 1/2/2013 6:14:31 PM : Outperform Start Price: $31.05 WFM Score: -23.58

Lots to like here. Lots of cash ($1.5 billion in November 2012) -- even after their special December dividend (must have cost ~$370 million) -- and very little debt ($24 million). The regular dividend seems puny, but after growing 40% last year and another 43% this year, it's headed in the right direction fast. Share buybacks, too, almost a half a billion dollars worth in the works. Growth? Yup; 335 stores in existence, with the old stores generating comps in the 6 - 8% range and the new ones 11 - 16%. Oh, and they're working up to a thousand stores. Also growing in Canada and the UK. Is it a little pricey? Sure. It's not the cheapest stock you'll ever buy, but these are some of the reasons for that. Of course, margins will never be as good as some other sectors, and you could argue that the big returns are past them.

You may not shop there -- you may not even have one within driving distance -- but there plenty of people who do, and not only are they getting high-quality goods, but odds are (warning: anecdotal evidence) they have secure incomes and can afford the good stuff. When you have to wait at the register because the cashier is busy stuffing $100 bills into another drop pouch... you will very good about being a shareholder.

Member Avatar LouPinella (< 20) Submitted: 2/14/2013 11:23:59 AM
Recs: 0

Good buying opportunity, I think; bought calls today (on sale! cheap!). We'll see...

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