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Trade-Ideas: Whole Foods Market (WFM) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Whole Foods Market ( WFM) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Whole Foods Market as such a stock due to the following factors:

  • WFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $137.0 million.
  • WFM has traded 1.3 million shares today.
  • WFM is trading at a new lifetime high.

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More details on WFM:

Whole Foods Market, Inc. owns and operates a chain of natural and organic foods supermarkets. The company offers produce, grocery, meat and poultry, seafood, bakery, prepared foods and catering, coffee and tea, nutritional supplements, and vitamins. The stock currently has a dividend yield of 0.7%. WFM has a PE ratio of 40.4. Currently there are 11 analysts that rate Whole Foods Market a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Whole Foods Market has been 2.5 million shares per day over the past 30 days. Whole Foods Market has a market cap of $21.8 billion and is part of the services sector and retail industry. The stock has a beta of 0.66 and a short float of 2.7% with 4.80 days to cover. Shares are up 28.5% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Whole Foods Market as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WFM's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • WHOLE FOODS MARKET INC has improved earnings per share by 20.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WHOLE FOODS MARKET INC increased its bottom line by earning $1.26 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.26).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Food & Staples Retailing industry average. The net income increased by 21.5% when compared to the same quarter one year prior, going from $116.85 million to $142.00 million.
  • 39.14% is the gross profit margin for WHOLE FOODS MARKET INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.64% is above that of the industry average.

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