Whole Foods Markets Fails to Become Predicted Power Player

whole foods marketsWhole Foods Markets (WFM) was predicted by some analysts to prove to be a new power player by the close of today’s market. However, the natural and organic chain turns out as a post-market laggard at the sound of the closing bell.  WFM reported its revenue for the quarter and showed that it rose more than 11 percent year-over-year to $4.29 billion. Analysts were forecasting a $0.44 per share, which would bring it up from the current $0.39 a share. In the world of stocks, that is a decent jump in the right direction.

Analysts were fairly confident in the predictions, however, at the closing bell, the numbers for Whole Foods Market were not adding up. In fact, WFM is down eight percent today.  WFM has shown an average dollar-volume of $219.2 million, a far drop from the reported volume of last quarter.  The average volume for WFM has been 3.5 million shares per day just over the past month, with a market cap of $20.5 billion.

The Whole Foods Markets may have failed to become the predicted power player today, but, does it show a future worth investing in? Most analysts agree that an investment in WFM would prove fruitful over time. The stock currently has a beta of 0.75 and a short float of 2.9 percent with 2.50 days to cover. Even though shares are down 3.4 percent today, it does not mean that World Food Market cannot make a complete turnaround.

Whole Foods Markets is a retail chain of stores specializing in natural and organic foods. Whole Foods Markets compete with other vendors like New Seasons and Trader Joes. However, in most communities that are trending towards the natural and organic foods, they also tend to shop at smaller independent stores, which is why stock in large chain natural and organic food stores can have a tendency to ebb and flow.

Whole Foods Markets current stock dividend yield is 0.9 percent with a PE ratio of 37.4. There are several analysts who are rating WFM a buy, five a hold and none are saying to sell. That should show stock holders that WFM still has a strong chance of becoming a stock well worth investing in. Especially as Americans continue to trend toward a more natural and healthy approach to appease their appetites.

Whole Food Markets has always traded well for its investors, even though it is well off of its high with a lowering guidance heading in to the new year.  Even so, investors still reaped 15.1 percent on WFM and were continuing to yield until the current stall, putting it off 4.5 percent year-to-date. Albeit, this trend in stock is unlikely to drive current investors from selling and new investors from buying since natural and organic food sales is all the latest trend in a healthy America.

While Whole Food Markets may be today’s post-market laggard, failing to become the power player many thought it would, that does not negate its chances to redeem itself tomorrow, or anywhere in the near future. Its steady revenue and trending style likely make it a safe play for investment.

By Adam Stier


The Street
Seeking Alpha

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