Biotech Values

[DewDiligence]

[OT] Whole Foods (WFMI) reached a new 12-month high in the AH session based on the earnings report after the close that was better than expected:

http://finance.yahoo.com/news/Whole-Foods-Market-Reports-prnews-2771263034.html?x=0&.v=1

WFMI is one of my favorite non-biotech stocks. During the past couple of years, a lot of banal and vacuous stuff has been penned about this company from Wall Street analysts and other pundits. These reports predicted the company’s doom from consumer tightening and increased competition from “mainstream” grocers. A prototype inane comment in one of these reports was that “soccer moms have changed their buying habits and are no longer willing to pay a premium price for organic foods.”

As though Whole Foods sold only organic items and depended on soccer moms for its profitability!

WFMI shares are up 300% from their Nov 2008 low, but the stock is still reasonably valued, IMO. When the US economy finally returns to a more normal level, WFMI will once again put up some great numbers (instead of numbers that are merely “better than expected.”)

WFMI has close to 200 stores and it plans to eventually expand to 400. Although the expansion plans have been dialed back to some degree on account of the economy, the underlying premise for the expansion remains valid.