Is It Time to Buy Whole Foods Stock?

Whole Foods' (NASDAQ: WFM  ) stock has taken a dip after the company reported quarterly earnings that disappointed some investors. Does that mean that we can finally pick up shares of this stellar business on the cheap?

In the video below, Fool contributor Demitrios Kalogeropoulos says no, arguing that Whole Foods is still too expensive for his tastes -- particularly when measured against another growing grocer, Kroger (NYSE: KR  ) . So, while he's a fan of Whole Foods' business, Demitrios says he'll be watching for a more attractive purchase price before jumping into shares.

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  • Report this Comment On November 13, 2013, at 10:22 AM, PRODOD wrote:

    I agree with your caution on WFM and would take it a degree further: IMO, WFM's growth will slow because they are already pushing their new stores into less viable MSA's. The company itself admits that their 'upscale' grocery model will only work in cities of 50,000 population or more yet project growth to about 1,000 stores by 2025: The problem is that there are only about 600 cities of that size in the US. So a large percentage of projected growth will come from adding stores to existing markets ... a tactic that recently failed for WFM in the Boston MSA. Add in the competition from KR (and others) and one is forced to consider the possibility that WFM has already 'picked the low hanging fruit' of their business model and that 'growth' may be tougher to come by....

  • Report this Comment On November 18, 2013, at 10:11 AM, TMFSigma wrote:

    Good points, @prodod.I do think Kroger is an often overlooked investment here. It's seeing steady sales growth on a huge base, and carries a decent dividend to boot. Looks like a bargain at just 14 times earnings, I'd say...especially when compared to WFM's 40+.




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Related Tickers

9/29/2016 9:30 AM
WFM $28.14 Down -0.15 -0.51%
Whole Foods Market CAPS Rating: ****
KR $29.76 Down -0.08 -0.27%
Kroger CAPS Rating: ****