Whole Foods is probably my no brainer trade of the year, heading into Turkey day. Their earnings misses have been nothing, compared to the carnage dealt out to shareholders–with shares off by 32% since last year.
Pick a metric, any metric: this stock is trading between a 15-35% discount based on historical norms.
The thesis play is two fold:
This is a premier brand tarnished and dragged through the mud as if they were selling cocaine on the side.
Pricing and margins will recover, especially with corn barreling lower, off by 12% in two weeks.
In summary, this is a prime target for activist shareholders, private equity guys who clamor to snatch brands like Whole Foods. I haven’t initiated a position yet, because the time isn’t ideal. However, if I was stuck holding just one depressed stock, a fallen angel of sorts, I wouldn’t lose a minutes rest owning WFM at 21x 2015 numbers.