Thursday, June 4, 2015

Hot Cheap Companies To Watch In Right Now

Hot Cheap Companies To Watch In Right Now: Whole Foods Market Inc.(WFM)

Whole Foods Market, Inc. engages in the ownership and operation of natural and organic food supermarkets. The company offers produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, coffee and tea, nutritional supplements, and vitamins. It also provides specialty products, such as beer, wine, and cheese; body care and educational products, such as books; and floral, pet, and household products. As of February 9, 2011, the company operated 302 stores in the United States, Canada, and the United Kingdom. Whole Foods Market, Inc. was founded in 1978 and is headquartered in Austin, Texas.

Advisors' Opinion:
  • [By Patricio Kehoe] ls operate roughly 150 stores each and handle an average of 10,000 stock- keeping units against 20,000 at Whole Foods.


    In order to maximize volume discount, Whole Foods purchases at regional or national scales. While many of its perishable products are obtained from local producers, almost a third of the companys purchases are sourced from United Natural Foods Inc. (UNFI). Their distribution agreement, valid through 2020, stipulates that UNFI will be the companys main provider of frozen foods and groceries. However, the company seeks to diversify its supplier base by sourcing form local farmers who are eager to suit its high-quality food production standards.

    Growth Drivers

    The companys successful mix of effective inventory management and strict cost-control measures adds to a revamp of its pricing strategy and a greater focus on value offerings. Hence, Whole Foods has delivered healthy gross margins in the range of 34.8% to 35.5% over the last three years.

    Furthermore, the company continues to open new stores and to integrate regional acquisitions. It opened 32 new locations in 2013 and expects to reach the count of 500 by 2017. As store volume augments, the firm benefits from both lower per unit costs! and sales increases. Its comps, in turn, also help bolster margins, since they continue to follow an upward trend. Moving forward, Whole Foods expects an escalation of 11% to 12% in total sales for 2014.

    Sturdy Growth Profile

    Whole Foods strong brand image, high-quality products and marketing expertise have earned the firm one of the strongest growth profiles in the industry. Its stock trades at 35.80 its trailing earnings, a premium compared to its peers average of 19.10. Its earnings per share growth, however, showcases an impressive 27.20% against the industry median of 5.10%, which will lead to more attractive multiples. Further, the stock delivered a healthy return on equity of 14.20% compa

  • [By Alyce Lomax]

    Whole Foods Market (NASDAQ: WFM  ) is a safe place for GMO skeptics to shop, since so many of its products are in fact organic, and many of its suppliers have voluntarily certified and clearly labeled their products as GMO-free. In fact, Whole Foods recently announced that it will require all of its suppliers to label products containing GMOs by 2018.

  • [By Steve Symington]

    Here's who it won't affect
    That said, investors absolutelyshould notassume Wal-Mart's initiative poses any realistic threat to specialty organic grocery businesses like Whole Foods (NASDAQ: WFM  ) and The Fresh Market (NASDAQ: TFM  ) , which both typically serveverydifferent client bases than those to which Wal-Mart caters.

  • [By Isaac Pino, CPA]

    Whole Foods (NASDAQ: WFM  ) can't do it; probably John Mackey told you that. Chipotle (NYSE: CMG  ) can't do it. Those sustainable companies that are in our space, there's just not enough supply, so we've got to hope that, over time, that this is going to change.

  • source from Top Penny Stocks For 2015:

No comments:

Post a Comment