Whole Foods Market: 3 Different Insiders Have Sold Shares This Month

| About: Whole Foods (WFM)

In this article, I will feature one grocery store that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Whole Foods Market (NASDAQ:WFM) operates as a retailer of natural and organic foods.

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Insider selling during the last 30 days

Here is a table of Whole Foods Market's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Scott Allshouse Regional President Feb 21-24 35,960 No 8,277 shares 81.3%
Patrick Bradley Regional President Feb 21 3,500 No 5,344 shares + 4,500 options 26.2%
Shahid Hassan Director Feb 18 5,813 No 34,645 shares 14.4%
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There have been 45,273 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Whole Foods Market's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 45,273 0
January 2014 0 0
December 2013 12,300 0
November 2013 141,380 0
October 2013 0 0
September 2013 0 0
August 2013 184,642 0
July 2013 0 0
June 2013 22,458 0
May 2013 412,504 0
April 2013 0 0
March 2013 100,000 2,939
February 2013 16,471 0
January 2013 0 0
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(Whole Foods Market had a two-for-one stock split on May 29, 2013)

There have been 935,028 shares sold, and there have been 2,939 shares purchased by insiders since January 2013.

Financials

Whole Foods Market reported the fiscal 2014 first-quarter, which ended January 19, financial results on February 12 with the following highlights:

Revenue $4.2 billion
Net income $158 million
Cash $1.0 billion
Debt $32.0 million
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Whole Foods Market's revenue growth has been slowing down since 2012.

Outlook

Whole Foods Market's fiscal 2014 guidance is as follows:

Sales growth 11%-12%
Comparable store sales growth 5.5%-6.2%
EPS $1.58-$1.65
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Competition

Whole Foods Market's competitors include The Kroger Co. (NYSE:KR), and Sprouts Farmers Market (NASDAQ:SFM). Here is a table comparing these companies.

Company WFM KR SFM
Market Cap: 19.80B 20.68B 5.43B
Employees: 80,000 343,000 14,200
Qtrly Rev Growth (yoy): 0.10 0.03 0.24
Revenue: 13.30B 99.42B 2.31B
Gross Margin: 0.36 0.21 0.30
EBITDA: 1.26B 4.54B 197.94M
Operating Margin: 0.07 0.03 0.07
Net Income: 563.00M 1.55B 45.39M
EPS: 1.50 2.98 0.30
P/E: 35.51 13.44 123.56
PEG (5 yr expected): 1.92 1.78 2.95
P/S: 1.50 0.21 2.30
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Whole Foods Market has the second-highest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
KR 0 5,000
SFM 0 102,977
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Only Whole Foods Market has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Whole Foods Market, and there have not been any insiders buying Whole Foods Market during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Whole Foods Market has an insider ownership of 0.50%.

Whole Foods Market has a $42 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $42 price target. I would place a stop loss at $65, which is the all-time high. The two main reasons for the proposed short entry are bearish Point and Figure chart, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in WFM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.