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What: Shares of natural food grocer Whole Foods
So what: Beating earnings estimates and raising guidance is a recipe for investor jubilation the same way a Philadelphia Eagles loss at home to the New York Giants is a recipe for fisticuffs. Whole Foods' fourth quarter was a touchdown with the two-point conversion, though, as sales advanced 15%, comparable-store sales increased 8.7%, and earnings per share rose 63%. Earnings per share of $0.33 easily outran the $0.28 that Wall Street had in its playbook, while the new guidance for 2011 earnings -- with a midpoint at $1.69 per share -- hurdled the previous estimates by both the company and analysts.
Now what: Whole Foods today looks cheap compared with Whole Foods of a few years ago, but you've got to believe in very robust growth to digest the valuation premium that the stock gets over traditional grocers like Kroger
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