Whole Foods Market (WFM) Marked As A Barbarian At The Gate
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.
Trade-Ideas LLC identified
(
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) 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 $157.7 million.
- WFM has traded 1.6 million shares today.
- WFM traded in a range 251.7% of the normal price range with a price range of $2.28.
- WFM traded above its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in WFM with the Ticky from Trade-Ideas. See the FREE profile for WFM NOW at Trade-Ideas
More details on WFM:
Whole Foods Market, Inc. operates as a retailer of natural and organic foods. The stock currently has a dividend yield of 1%. WFM has a PE ratio of 33.5. Currently there are 11 analysts that rate Whole Foods Market a buy, no analysts rate it a sell, and 12 rate it a hold.
The average volume for Whole Foods Market has been 3.6 million shares per day over the past 30 days. Whole Foods Market has a market cap of $19.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.86 and a short float of 5% with 6.07 days to cover. Shares are up 6.7% year-to-date as of the close of trading on Wednesday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Whole Foods Market as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WHOLE FOODS MARKET INC has improved earnings per share by 9.5% 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 $1.56 versus $1.47 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.56).
- WFM's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market on the basis of return on equity, WHOLE FOODS MARKET INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has increased to $387.00 million or 14.83% when compared to the same quarter last year. Despite an increase in cash flow, WHOLE FOODS MARKET INC's cash flow growth rate is still lower than the industry average growth rate of 33.89%.
- You can view the full Whole Foods Market Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
null