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Whole Foods Market (WFMI) is to the organic food market what Starbucks (NASDAQ:SBUX) is to the coffee market. Both portray, if I may say, a high-end ambiance with focus on the customer, their shopping experience, and one of the most important aspects - their employees [SBUX gives stock options even to temporary employees, and WFMI takes great care of their employees too].

Wall Street is doing to WFMI what it did to SBUX and to many others: first they shoot the expectations to the sky and then one day they all fall short [even the mighty GOOG will one day]. Wall Street then takes them to the cleaners.

A lot of people doubted SBUX's growth, but they have constantly found new markets [i.e. China, the Middle East. etc]; similarly, I think WFMI will too.

Given that WFMI is the fastest growing public retail food chain in the US, I expect its shares to trade at a significant premium multiple to supermarket peers and the S&P 500.

Although Wall Street anticipates a slowdown, and rightfully so, in near term earnings growth due to a significant rise in expenses related to expansion plans, I continue to believe that the company will lead the retail food industry in long-term earnings growth.

WFMI 1-yr chart
WFMI 1 yr chart

Source: What's the Deal with Whole Foods Market?