Whole Foods Market (Nasdaq: WFMI) used to be a stock that always seemed pricey. However, given its recent issues with slowdown in profits as it digests the Wild Oats acquisition -- and the stock's subsequent beatings -- I can't help but wonder if my cheapskate (er, value investor) friends might start finding this stock tantalizing as it continues to drop on short-term concerns.

Then again, maybe it's still just not their reusable bag.

Downer days
Whole Foods' net income fell 13% to $40 million, or $0.29 per share. This included $0.06 per share in costs related to the Wild Oats acquisition. Total revenue jumped 27.6% to $1.9 billion, and same-store sales increased 6.7%.

The organic grocer's sales figures still sound pretty respectable to me, but of course, factors like a deceleration in comps growth certainly gives nervous investors even more to get nervous about.

Meanwhile, the company's free cash flow is running in the negative range, and it increased its credit line to $350 million. Its long-term debt now stands at $828 million (although it does have $61 million in cash). Its beloved Economic Value Added metric, or EVA, has dwindled to negative $4.6 million from positive $12.5 million last year this time. These are definitely the kind of figures that sound like a different Whole Foods than several of us remember from a couple years ago.

Is the economy an organic enemy?
Here's another wrinkle: Past recessions may not have hurt Whole Foods much, but there's good reason to wonder if, like Starbucks (Nasdaq: SBUX), this one will (and perhaps already has).

For the last couple quarters, Chairman and CEO John Mackey pointed out that, historically, Whole Foods' clientele was fairly resilient despite macroeconomic issues. However, as many of us have noticed, the current economic slowdown is all about the end of the consumer feeding frenzy. And unlike the last recession, the implications are far reaching and tapping into many demographics, as homes lose value, jobs are lost, and food and gas prices skyrocket.

In the company's conference call, Mackey admitted that, given the company's larger size and increasingly mainstream position, and so it may be more vulnerable this time around. Mackey didn't come right out and say the economy is definitely causing some sluggishness, but rather suggested that it could be the economy and admitted that the current conditions in the economy are "weird." He admitted there could be some economic issues, although he also said competitors are tougher.

Patience is a virtue
I admit it wasn't the most thrilling quarter ever, and there are plenty of concerns as the American consumer is quite clearly strapped, for the short term anyway. Prudence is in, and even affluent consumers are showing signs of pulling back.

However, I'm holding my Whole Foods shares, and I think the stock looks downright tantalizing, even for more value-oriented investors than those who traditionally gobbled up shares of Whole Foods for its high-growth story.

Whole Foods is trading at just 23 times this year's earnings, which sounds very low for this particular stock, and it has a PEG ratio hovering around the key 1.0 level (currently, it's 1.19). I still believe in the long-term growth story of this company and that comparing it to traditional grocers like Safeway (NYSE: SWY), Kroger (NYSE: KR), and Wal-Mart, which admittedly trade at lower multiples, is like comparing Amazon.com (Nasdaq: AMZN) to retailers like Borders (NYSE: BGP) and Barnes & Noble (NYSE: BKS). I just don't believe that's an apples-to-apples comparison for this innovative grocer that has so much room to grow and rock the industry with its forward-looking ideas.

Meanwhile, I have to say that any reasonable long-term investor must have realized the Wild Oats acquisition was not an instant, magic bullet but rather a long-term strategic decision, even if shares of Whole Foods went wild when the deal was announced in February 2007.

These are the days that test investors' mettle, that's for sure, and they can certainly test one's belief in the adage, "Patience is a virtue." However, given the fact that, in many cases, the best bargains are found when overall sentiment veers toward the bearish, I'm leaning toward the idea that now's a great time to pick up great companies like Whole Foods Market at greatly reduced prices, as long as the long term still looks bright.

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