iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
16,235 Blog Posts

Back to Food

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.

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24 comments

  1. bart smith

    Damn Fly I recently bought a couple thousand shares. You are starting to think like me.

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  2. djmarcus

    21x is too rich for me, though I have been monitoring…

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  3. UncleBuccs

    I’m a Trader Joe’s man….but I’m also a humble hillbilly.

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  4. greencandle

    Yawwwwnnnn Did some Seeking Alpha college senior get a hold of your blog?

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    • Dr. Fly

      How about this?

      Blow me

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      • greencandle

        Now you’re at high school sophmore level.

        The post reads like some 21 year old who took his 2nd finance class is trying to pitch his investment club to buy 100 shares.

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        • Dr. Fly

          Green candle

          I invite you to blog better than me. Frankly, this discussion is a joke, as none of you clowns can hold a candle to my writing. Please.

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        • Dr. Fly

          Also, you’re such a laughable fucking idiot

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  5. sia

    seriously? A grocery stock trading at 25 PE and 22 forward PE is your pick? “15-35% discount based on historical norms”… right, when it was a growth stock. It’s not a growth stock any more! I urge you to reconsider your thoughts on WFM!

    I bet you KR will do better than WFM. Even the action today agrees with me.

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  6. Dr. Fly

    Kr is up over 45% whole wfm is down. Who cares what you think? Wfm isn’t your ordinary grocery store you shop rite going pleb. It is an experience.

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  7. Dr. Fly

    And the discount I speak of is based off pe, p/b, p/s, p/fcf since 2004

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  8. Narredwhal

    Sia, that statement sounds a lot like the rhetoric surrounding Apple at $400.

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    • Dr. Fly

      The contrarian opinion is desired for beaten down brand names.

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  9. it is showtime

    On a psychological point, feeling again the pull, the desire of ‘someone’ wanting to keep everyone “in” and playing
    Keep in mind, someone wanting to control the way you act usually has alterior motives, not aligning with your own

    Just a “deep thought”. On the food topic, Wegmans (cocky glance). Wegmans. Not tradable though (fail)

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    • duckkell

      Wegmans a money making privately owned machine…started here

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  10. duckkell

    the real question is Santelli or Liesman?? who do you believe has a better handle on the Fed??

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    • newbalance

      In the end Santelli will come out on top…when that happens is the crux.

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  11. penfuin

    Aldi (private) is the true innovator

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    • tradercaddy

      And owner of Trader Joe’s.
      I go to Aldis all of the time, Publix for their BOGO, and started going to Trader Joes (they just opened one near here) for specialty stuff.

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  12. matt_bear

    fly, I think your pick is a good one….it just has to stop going down first.

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  13. duckkell

    BALT sinking..

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  14. NON Solo

    The Standard & Poor’s 500 Index fell 0.2 percent at 10:44 a.m. in New York. The Russell 2000 Index of small companies sank 1 percent after a Fed report said valuations of some biotechnology and social media stocks may be “stretched.”

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