kowalski

Whole Foods Market: Like Starbucks, Hit by Slowing Economy, Increased Competition

"WFMI may be opening too many stores too fast. On Maui, WFMI is opening a store in an odd location."

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The Maui store is going to be (very) small [= only 27,000 sq. ft.]; WF is probably testing market acceptance in less than optimal locations.

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" the Basalt, Co (Aspen) store..."

What is wrong with this medium size store [= 44,000 sq. ft]? As far as I can tell, it's a small, but rich town with lots of tourism. Why should there be not a WF store?

"The median income for a household in the town was $67,200, and the median income for a family was $73,375." [source: en.wikipedia.org/wiki/...]

Whole Foods Market: Like Starbucks, Hit by Slowing Economy, Increased Competition

"I can envision this thing dropping to a mid teen PE which means a high teen share price."

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A share price below 20 would translate into a price-sales-ratio of less than 0.31x [based on 1yr projected sales 9200 mio, float 140.6 million shares] and a dividend yield of more than 4%.

I cannot see this happening.

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My market opinion:

I do think some large investors have established substantial positions on the 14th / 15th [more than 30 million shares traded].

I see the downside to be contained [not lower than 26].

I actually think the stock is 'cheap' at prices below 29.

--- Profits are artificially depressed, because of massive up-front investments; under current (negative) economical conditions investors are overly cautious in their estimate of projected ROI; here lies the opportunity for long term investors!!! ---

The Starbucks Phenomenon and the U.S. Slowdown

During my times in investment banking, when I and my collegues earned megabucks, we would drink 3 - 4 SBUX coffees [always Venti] a day per person. It was bad, really bad. It almost ruined my teeth and I suffered from sweat attacks, but still we would keep on drinking the stuff on a daily basis. I haven't had a SBUX since 2002 - the day I left banking I stopped drinking coffee! I now prefer drinking tea --- in a SBUX cup! Insane? Yes, I know.