WFMI - Whole Foods

D

DeepFried

What is up with this stock? No debt but low ROE and a forward PE of 50. It's a frigging grocery store and it trades like the tech stocks of days gone by.

I bought puts and it went up 10 points in my face before I got out with a more than 50% loss. :eek:

Anybody think this stock will become vulnerable to a selloff in the near future?
 
The thing about Whole Foods is, once you start going there you can't stop. Should have bot the stock a few years back when I realized I was gradually doing all my grocery shopping there.

edit: the most recently opened branch in NYC is always a madhouse, another is slated to open soon -- I think plenty of room before they start to fill into anticipated potential. I ain't long this stock or anything, but it's one of those places that me and the wife would figure into where we're looking to move, if that means anything :)
 
try OATS as a competitor play.

The healthy/organic food industry is an on and off hot sector. Check out LWAY a couple years back.
 
The store remind me alot of starbucks. Very specialty retailer rather than a grocery store.

The bet is they will be able to achieve higher margins and avoid competition.
 
Quote from illiquid:

The thing about Whole Foods is, once you start going there you can't stop. Should have bot the stock a few years back when I realized I was gradually doing all my grocery shopping there.
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LOL. I knew guys in the 90's who were getting creamed (no pun intended) shorting SBUX even though as consumers they were spend a thou a year there.

I find it tough to call a top, at least on fundamentals, on a growing retailer. Whole Foods continues to open stores, they're still no where near full penetration in America's yuppified minefield. Sure 50x forward next year looks ridiculously expensive but what if that turns out to be only 18x 2010. Clearly that's what the market's thinking. Equally clear is if we go into a recession, the number of people willing to pay $18 for a lb. of salmon will be greatly diminished.
 
Quote from illiquid:

I ain't long this stock or anything, but it's one of those places that me and the wife would figure into where we're looking to move, if that means anything :)
More...

lol, yeah, they're very good at what they do. They're sort of the Google of natural food stores. I often shop there myself so I'm a customer also.

Still, the stock has elements of mania to the way it trades. Nothing wrong with that I guess, but it's bound to pop one of these days.
 
Quote from illiquid:

The thing about Whole Foods is, once you start going there you can't stop...
... I realized I was gradually doing all my grocery shopping there.

... it's one of those places that me and the wife would figure into where we're looking to move...
More...
Isn't that the truth.

Same thing for Trader Joe's - except that it remains privately held.

Life is good: Whole Foods, Trader Joe's, Sunflower, Henry's Marketplace, Wild Oats ... ;-)
 
Wal Mart is pushing out the standard grocers and replacing their stuff with lower cost foods. I've been thinking that Whole Foods will be picking up market share from the shoppers that "don't do Wal Mart". Also Americans are waking up to the fact that their diet sucks if they let the grocers/advertisers/food processors do their thinking for them and are looking for "the good stuff".

The guy that is CEO of Whole Foods was a Hippie and had a partner in a health food store/eatery in the Los Angeles area in the 60's. The former partner still runs the original business and from what I hear could care less about the big bucks. I know all that from a friend that knew them "when" so if I got it wrong, my apologies.

If Whole Foods undergoes a change of management I would stop shopping there, the original guys always do something because the love it, the newer management will just squeeze it.
 
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