I'm not going to rub it in, but back in December, I didn't win many friends for advising investors to sell the stock. At the time, the shares traded close to $56. The stock closed Wednesday at $38.93, down 30% since my recommendation.
My caution had nothing to do with Whole Foods' status as a well-run company. Instead, it was because Whole Foods had gotten too good for its own good. The company's name, which became synonymous with health and wellness, had drawn too much competition. The stock had traded on enormous growth expectations. The price-to-earnings ratio then was close to 40. The recent decline has dropped that ratio to 25.
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