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Investing

Analyzing Whole Foods (WFMI)

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By Douglas A. McIntyre Published
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By Yaser Anwar, CSC of Equity Investment Ideas

  • WFMI is to organic food market what SBUX is to the coffee market. Both portray, if I may say, a high end ambiance with focus on the customer, their shopping experience and one of the most important aspects- their employees (SBUX giving stock options even to temporary employees and WFMI taking lots of care of their employees too).
  • The Street is doing to WFMI what it did to SBUX. First they shoot the expectations to the sky, once a company , and one day they all fall short (even the mighty GOOG will one day) and Wall St. takes them to the cleaners.
  • A lot of people doubted SBUX’s growth, but they have constantly found new markets [i.e. China, Middle East etc], similarly I think WFMI will too.
  • Given that WFMI is the fastest growing public retail food chain in the US, I expect its shares to trade at a significant premium multiple to supermarket peers and the S&P 500.
  • Although the street anticipates a slowdown, rightfully so, in near term earnings growth due to a significant rise in expenses related to expansion plans, I continue to believe the company will lead the retail food industry in long-term earnings growth.

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    About the Author Douglas A. McIntyre →

    Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

    McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

    His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

    A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

    TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

    McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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