Whole Foods still a long-term Buy to Deutsche


Deutsche Bank backs up its Buy rating on Whole Foods (WFM -9.2%) as it takes a longer view on the company's prospects.

The investment firm cites growth in +$50 customer baskets and gross margin improvement as two trends that could sustain.

Share price could also get a boost from buybacks with the company flush with $1.4B in cash at quarter end.

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Comments (12)
  • Blazen
    , contributor
    Comments (63) | Send Message
     
    1. The company bought back no shares last quarter.
    2. Comp store sales growth has rapidly declined.
    3. Gross margins won't improve due to price decreases.
    4. Growth in customer baskets is per management and already reflected in comp store sales which are hitting the wall.

     

    These hacks have no idea what is happening. I'm short and will continue to hold short for long term profits.
    7 Nov 2013, 09:51 AM Reply Like
  • nlitwinetz
    , contributor
    Comments (101) | Send Message
     
    Your thesis would make sense if WFM weren't going to open more stores. But the company can grow profits without increasing margin or comp store sales by opening new stores. There may be some money to be made in the near term by shorting the stock, but in the long run the stock should be headed north.
    7 Nov 2013, 10:37 AM Reply Like
  • Blazen
    , contributor
    Comments (63) | Send Message
     
    At 45x earnings, the market has already priced in all the growth for the next several years and is assuming all past trends continue forever. Good luck with that.
    7 Nov 2013, 10:43 AM Reply Like
  • fredj
    , contributor
    Comments (155) | Send Message
     
    You're going to lose a lot of money with your short, but hey that's your problem.
    7 Nov 2013, 05:58 PM Reply Like
  • Gary J
    , contributor
    Comments (11104) | Send Message
     
    For a company that is not producing iPhones and the like, increasing increasing revenues by 12% and earnings by 20% makes P/E ratios pretty meaningless. Even if it were 45, which is incorrect.
    7 Nov 2013, 06:50 PM Reply Like
  • Blazen
    , contributor
    Comments (63) | Send Message
     
    Right Gary. Valuation doesn't matter. Good luck with that. Should have sold at $65. LOL
    8 Nov 2013, 08:57 AM Reply Like
  • Gary J
    , contributor
    Comments (11104) | Send Message
     
    Trust me. You do not want to compare WFM investment results with me.
    8 Nov 2013, 07:49 PM Reply Like
  • Gary J
    , contributor
    Comments (11104) | Send Message
     
    There is a large aging, health conscious, affluent segment of the population that will continue to flock to Whole Foods. As they get to 1000 stores buying power and margins will improve. There are few companies that seek to benefit shareholders, employees and customers equally. Whole Foods is one of them.

     

    A nice 4 bagger in five years I will continue to hold. Short at your peril.
    7 Nov 2013, 10:15 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1862) | Send Message
     
    So you expect it to go up over 30% per year for next 5 years? Do you expect earnings to increase by over 30% as well or do you think P/E ratio will go higher ?
    7 Nov 2013, 12:19 PM Reply Like
  • Gary J
    , contributor
    Comments (11104) | Send Message
     
    I don't know, do you?

     

    All I know is I buy and hold (for years) best-in-class companies like this and AAPL, GOOG, IMAX, AKAM, TRIP, etc. and make money while you are fretting about 30% this and 30% that. lol
    7 Nov 2013, 01:22 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1862) | Send Message
     
    No AMZN? Lol
    8 Nov 2013, 01:40 AM Reply Like
  • Gary J
    , contributor
    Comments (11104) | Send Message
     
    Look up "etc". then get back to your numbers. lol
    8 Nov 2013, 06:52 AM Reply Like
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