Tuesday August 21, 2012
by Leo Fasciocco, editor Ticker Tape Digest
With annual revenues of $11.1 billion, Whole Foods Market (WFM) owns and operates the country's largest chain of natural food supermarkets.
It is like a neighborhood grocery store, an organic farmer's market, a European bakery, a New York deli, and a modern supermarket all rolled into one.
With annual revenues of $11.1 billion, they own and operate the country's largest chain of natural food supermarkets.
WFM is poised to show strong earnings for the upcoming third quarter and we see the stock in a good spot to be accumulated.
Since setting a bear market falling low at $7.04, the stock has since made a sensation recovery and is in a strong uptrend.
It peaked near 97 in June. The stock then put down a flat base that featured one shakeout to the downside. The stock bounced back quickly from the selling spree. It is poised to breakout to a new high. If it can do that it could draw in more buying.
This fiscal year ending in September, analysts are forecasting a 30% jump in WFM's earnings to $2.52 a share from $1.93 a year ago. Analysts have boosted their estimates.
The stock sells with a price-earnings ratio of 38. That is high given the earnings growth rate. So one needs to be watchful of the stock.
Going out to fiscal 2013 ending in September, Wall Street projects a 15% rise in net to $2.90 a share from $2.52 anticipated for this year.
We suggest accumulation of a partial stake now with further buying to be done on a breakout over 97.60. We are then targettng WFM for a move to 115 off a breakout. A protective stop can be placed near 91.
Learn more about this financial newsletter at Leo Fasciocco, editor Ticker Tape Digest.