4-Star Stocks Poised to Pop: Whole Foods Market

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, natural and organic food retailer Whole Foods Market (Nasdaq: WFM  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Whole Foods' business and see what CAPS investors are saying about the stock right now.

Whole Foods facts

Headquarters (founded) Austin, Texas (1978)
Market Cap $17.5 billion
Industry Food retail
Trailing-12-Month Revenue $11.1 billion
Management Co-founder/Co-CEO John Mackey
Co-CEO Walter Robb
Return on Equity (average, past 3 years) 12.1%
Cash/Debt $1.1 billion/$19.1 million
Dividend Yield 0.6%
Competitors Kroger
Safeway
Trader Joe's

Sources: S&P Capital IQ; Motley Fool CAPS.

On CAPS, 88% of the 4,824 members who have rated Whole Foods believe the stock will outperform the S&P 500 going forward.

A couple of months ago, one of those bulls, fellow Fool Thomas Engle TMF1000, succinctly summed up the outperform case for our community:

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 [actually 329].

As always the P/E ratio is on the high-side at 40.27, but it is one we believe will grow for many years. ...

Like [Hain Celestial Group], 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.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite its strong four-star rating, Whole Foods may not be your top choice.

We've found another retailer we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Whole Foods and Hain Celestial. Motley Fool newsletter services have recommended buying shares of Whole Foods and Hain Celestial. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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