Whole Foods' Stock Price Has Me Dancing in the Aisles

My Take

To understand why I'm bullish on Whole Foods -- even while the company's latest quarterly report showed a 13% slide in profit, missing Wall Street estimates -- let's examine how the company makes money and how well it's accomplishing its mission, or "Declaration of Interdependence," as it boasts on its Website.

Let's also peek into management, because to be honest, I was a tad concerned after the brouhaha surrounding CEO John Mackey, who was recently cleared by the SEC for sending about 1,400 anonymous Yahoo! (YHOO Quote) postings about Whole Foods' prowess under the screen name "Rahodeb" -- his wife's name spelled backwards. Tricky!

Whole Foods makes money primarily from high margin sales of organic varietals in a booming organic food market in the U.S. This industry is expected to grow $3.5 billion a year and top $30 billion in 2009, according to the Organic Trade Association, with Whole Foods its eminent poster child. Credit Suisse (CS Quote) analyst Edward Kelly writes in his latest report on Whole Foods that "the industry will grow at least in the high single digits for the foreseeable future."