While Whole Foods Market (WFM) is busy shedding its reputation for selling pricey groceries, there's little debate about its stock being expensive. Shares are up better than 300% over the past five years, and are valued at 40 times trailing earnings. However, long-term investors shouldn't shun the stock even at that price. In the video below, Fool contributor Demitrios Kalogeropoulos provides three reasons that the grocer deserves a premium.
Whole Foods is growing comparable sales at an industry-leading clip, he says, and is opening new locations at a record pace. Plus, the company just set a new quarterly record for gross profit. Together, Demitrios argues, these metrics mean that Whole Foods could quickly earn its valuation and make today's share price seem cheap in just a few years.
