Whole Foods Market (WFM)
Company profile: Whole Foods is the largest U.S. retailer of natural and organic foods and has about 300 stores, including ones in Canada and England. In addition to groceries, it sells environmentally safe household items; meat, poultry, and seafood free of growth hormones and antibiotics. It is sometimes derisively referred to as "whole paycheck" for its relatively high-priced goods.Share performance: up 11.6% in the past three months; it gained 38% in 2011; three-year average annual return of 93%. Investor takeaway: The company resonates with people who can afford to pay for what they perceive to be goods that represent health and wellness. S&P Capital IQ has Whole Foods rated "buy." Morningstar analysts write that "Whole Foods generated over $800 in sales per square foot in fiscal 2010, significantly higher than that of the average supermarket," and note that it has no debt and the ability to fund new-store growth without borrowing.
Daimler (DAI) Company profile: Daimler has some of the top luxury car brands in the world including Mercedes-Benz and Maybach (which it's phasing out). It also owns stakes in a wide range of other automakers. Share performance: up 8.7% in the past three months; down 30% in 2011; three-year average annual return of 11.3%. Investor takeaway: S&P has it rated "hold." But Morningstar says the company's "brand equity, combined with cost-cutting initiatives, gives it the ability to report strong profits as vehicle demand normalizes. Daimler's luxury brands are some of the most valuable in the world and give the company some protection against the cyclical downturns of auto sales." And luxury-car sales are also on the rise. On Thursday, Daimler said its Mercedes-Benz cars division's global sales hit a record 1.36 million, a rise of 7.7% year-over-year. In the U.S., 2011 sales rose 13%, and German luxury-car rival BMW (BMW) had similar gains. In particular, it's seeing booming sales in Russia, Brazil, India and China. Capital Research and Management (American Funds) owns almost 4% of its shares, more than double that of the next largest shareholder. The German company doesn't have significant U.S. analyst coverage.
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