This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Quick Take: Merck Beats Whole Foods

NEW YORK ( TheStreet) -- TheStreet's Gregg Greenberg was with Michael Raynor to discuss how exceptional companies function differently than their peers.

Raynor points to two basic rules, the first he says, is "better before cheaper," meaning that companies shouldn't compete on price. Instead, Raynor believes superior companies create additional value in their product, something consumers are willing to pay extra for.

The second rule is nearly just as simple, "revenues before costs," he says. The simple explanation is that exceptional companies will drive profitability with higher revenues, not higher cost cutting.

Raynor added that his studies are lifelong, meaning that he doesn't study companies over specified periods of time, but over the company's entire publicly traded existence.

While there are always bumps in the road and questionable decisions made, he has found that successful companies all have one recurring theme: Focus.

He added, "over time, they systematically stay focused on the right problems and come up with, close enough to, the right answers."

One company that ranks high, according to Raynor, is Merck (MRK - Get Report), the pharmaceutical giant. While Merck's peers may have great research departments -- like Merck -- they haven't seen the same success because they haven't followed the two principles Raynor pointed out.

"What distinguished Merck, was its ability to expand internationally and to diversify its product base," he added.

Greenberg was quick to question why Whole Foods Market (WFM - Get Report) was so far down Raynor's list, since it appears to be doing very well.

Raynor quickly reminded him that he takes the company's entire public existence into consideration and that Whole Foods wasn't very profitable in its early years as a publicly traded company.

Although, he does admit that the company appears to be doing many things right and has been on a tear as of late. Its profitability has been increasing and Raynor concludes that it "bodes well for its continued strong performance."

-- Written by Bret Kenwell in Petoskey, Mich.
Bret Kenwell currently writes, blogs and also contributes to Rocco Pendola's Weekly Options Newsletter. Focuses on short- to intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MRK $54.84 0.00%
WFM $29.08 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs