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Thoughts on Whole Foods (WFM)?
Posted on 2/13/14 at 10:50 am
Posted on 2/13/14 at 10:50 am
Anyone have any WFM or looking to buy/sell right now?
I bought a little bit a few years ago when I graduated at about $61 (before the split). I doubled up on it back in October when it hit 65 (after the split), but it has dropped over 20% since then.
Should I cut my losses now with the low growth outlook? Or is this just a sign of a transition to a more "mature" company? They have increased dividends the past few years.
FYI - I'm 25, and my WFM position is actually in my taxable account right now which I plan to use for a down payment on a house in a few years. The WFM position makes up about 13% of my taxable account and less than 3% of my entire portfolio (including 401k and IRA).
I bought a little bit a few years ago when I graduated at about $61 (before the split). I doubled up on it back in October when it hit 65 (after the split), but it has dropped over 20% since then.
Should I cut my losses now with the low growth outlook? Or is this just a sign of a transition to a more "mature" company? They have increased dividends the past few years.
FYI - I'm 25, and my WFM position is actually in my taxable account right now which I plan to use for a down payment on a house in a few years. The WFM position makes up about 13% of my taxable account and less than 3% of my entire portfolio (including 401k and IRA).
4
Posted on 2/13/14 at 10:54 am to kennypowers816
I have done no research whatsoever on them. But I did see a headline this morning that they have upped their goal of # of stores from 1000 US wide to 1200.
I'd dig into that projection and see if you can figure out where the company might be heading. Sounds like they are preparing to exceed original expectations so might be one to hold.
I'd dig into that projection and see if you can figure out where the company might be heading. Sounds like they are preparing to exceed original expectations so might be one to hold.
Posted on 2/13/14 at 10:58 am to Chris4x4gill2
I read they are going to try doing floating checkouts like at the Apple Store where they have 4square and iPads to check customers out throughout their stores, could help increase
Posted on 2/13/14 at 2:14 pm to kennypowers816
quote:
They have increased dividends the past few years.
They have always paid a dividend, even while growing rapidly. Its because they didn't want to over extend themselves, so I wouldn't say its them giving up on growth. They have always managed their growth expectations very conservatively.
Obviously the stock doesn't have the room to grow it did 5 years ago but I have an immense amount of faith in management. They handled the recession brilliantly and have continued to run their business successfully. My only concern is that they squeeze margins and possibly dilute their brand by trying to lower prices to make expansion more feasible in undeveloped areas.
Posted on 2/13/14 at 2:19 pm to barry
Read where they've acquired some properties that are a pure cost to them now due to rehab/etc. They plan to have them rolling to start 2015. I bought a few shares and will dive in if they go under $50.
Posted on 2/13/14 at 8:08 pm to kennypowers816
The richest man I know gave me some investing advise:
1. Never invest in restaurants
2. Never invest in trucking companies
3. Never invest in airlines
4. Never invest in grocery stores
1. Never invest in restaurants
2. Never invest in trucking companies
3. Never invest in airlines
4. Never invest in grocery stores
Posted on 2/13/14 at 10:14 pm to nelatf
We did a case study about whole foods in class and I came away really against investing in them. They are going to get beat on cost by large grocery stores that are now offering the organic foods and their market share is going to shrink to those that think whole foods is "more sustainable".
Also I believe I am the type of consumer they are targeting, 20s-30s with disposable income and I love whole foods but it just isn't cost effective. I will go for a thing here and there but now I just go to a farmers market and get even higher quality for less money. I don't think they are going out of business anytime soon but I don't see a lot of growth in the future.
Also I believe I am the type of consumer they are targeting, 20s-30s with disposable income and I love whole foods but it just isn't cost effective. I will go for a thing here and there but now I just go to a farmers market and get even higher quality for less money. I don't think they are going out of business anytime soon but I don't see a lot of growth in the future.
This post was edited on 2/13/14 at 10:15 pm
Posted on 2/13/14 at 10:18 pm to nelatf
quote:
Never invest in trucking companies
This is the only one I can't agree with.
Posted on 2/14/14 at 6:08 am to reb13
I agree. The "whole" food concept is a line of crap anyway. They are living off of people who have no clue on the realities of the food supply and are very susceptible to a downturn in the economy.
Posted on 2/14/14 at 7:52 am to agdoctor
quote:
They are living off of people who have no clue on the realities of the food supply and are very susceptible to a downturn in the economy.
They made the recession in 2008 their bitch, so im not exactly sure you know what you are talking about.
Posted on 2/14/14 at 7:54 am to reb13
quote:
They are going to get beat on cost by large grocery stores that are now offering the organic foods and their market share is going to shrink to those that think whole foods is "more sustainable".
Yes some grocers sell more organic foods now, but IMO they don't have the same customers. They are selling them to their regular shoppers who wouldn't go to whole foods to begin with. Whole Foods brand is very valuable.
Posted on 2/14/14 at 8:28 am to agdoctor
quote:
They are living off of people who have no clue
You mean people who like shopping in nice stores and not have to be surrounded by idiots at places like Wal-mart.
In alot of markets, their meat, produce,seafod, cheese, etc are much better than their competitors.
This post was edited on 2/14/14 at 8:29 am
Posted on 2/14/14 at 9:24 am to notiger1997
quote:
In alot of markets, their meat, produce,seafod, cheese, etc are much better than their competitors.
Absolutely but it costs just as much as a restaurant. I can get Kobe beef at h mart for half the price.
Posted on 2/14/14 at 9:44 am to reb13
quote:
Absolutely but it costs just as much as a restaurant. I can get Kobe beef at h mart for half the price.
Meh, some of it does, some doesn't.
I don't shop there very much because I have good stores nearby with pretty good quality. I can understand why people do go there though.
Posted on 2/14/14 at 1:46 pm to nelatf
quote:
3. Never invest in airlines
i love investing in airlines.
In general, however, I wish I didn't.
As for whole foods, I'm leery of them because while I do like their product, I like what they're doing, but I think others will do what they do cheaper - and are starting to do that - and will take their market.
This post was edited on 2/14/14 at 1:48 pm
Posted on 2/14/14 at 5:47 pm to Overbrook
quote:
As for whole foods, I'm leery of them because while I do like their product, I like what they're doing, but I think others will do what they do cheaper - and are starting to do that - and will take their market.
This is where I disagree with some of those in this thread. "Regular" grocery stores already offer organic, healthier options, however they will never have the depth and overall shopping experience that WFM offers.
WFM caters to wealthier consumers who aren't going to start shopping at Kroger or Publix just because organic broccoli is $1 cheaper there. They'll keep going to Whole Foods because $1 is nothing, and the product variety is deeper at Whole Foods.
This post was edited on 2/14/14 at 5:48 pm
Posted on 2/14/14 at 6:28 pm to cameronml
quote:
They made the recession in 2008 their bitch, so im not exactly sure you know what you are talking about.
I buy stocks because I think they will continue to grow for the long term. $5 dozen of eggs because the chickens live in a yard is lovely.I think $1.50 for ones that live in cages is just fine. I also think paying $4 for a cup of bad coffee isnt smart either. The amount of dead insects or mouse droppings allowed in "whole" foods is exactly the same as in the food at Wal Mart or Winn Dixie or whoever. Short term it will probably grow. Long term I dont see it as sustainable.
Posted on 2/14/14 at 8:13 pm to agdoctor
quote:
$5 dozen of eggs because the chickens live in a yard is lovely.I think $1.50 for ones that live in cages is just fine. I also think paying $4 for a cup of bad coffee
Oh, you are one of those who likes to inflate prices to help make your point.
When I stop at Starbucks, my cup of awesome coffee cost $1.80.
I'm sure the average cost of eggs at Whole Foods is closer to $3.
Btw, Whole Foods isn't some new business that you are just hearing about. They have been doing this for a long time and doing it well.
Posted on 5/7/14 at 11:38 am to kennypowers816
Rough day for WFM. 
I sold my stake at $48 a few weeks ago thankfully
I sold my stake at $48 a few weeks ago thankfully
Posted on 5/7/14 at 12:00 pm to cameronml
quote:
This is where I disagree with some of those in this thread. "Regular" grocery stores already offer organic, healthier options, however they will never have the depth and overall shopping experience that WFM offers.
WFM caters to wealthier consumers who aren't going to start shopping at Kroger or Publix just because organic broccoli is $1 cheaper there. They'll keep going to Whole Foods because $1 is nothing, and the product variety is deeper at Whole Foods.
as an avid whole foods shopper, this. So what if my grocery bill is 10-20% cheaper going to kroger. I will pay $60 a month to not have to wait in line and deal with retards. Kroger is a shitshow, they don't have the things i want, and their organic selection is just really pathetic (and way more expensive than whole foods). And WFM employees aren't complete retards too.
I can see sprouts eating into their margins though. Sprouts has the organic shite but is cheaper and isn't the same level of shite show.
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