Trade-Ideas LLC identified
) as a "water-logged and getting wetter" (weak stocks crossing below support 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 $165.8 million.
- WFM has traded 8.8 million shares today.
- WFM traded in a range 220.8% of the normal price range with a price range of $1.42.
- WFM traded below its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on WFM:
Whole Foods Market, Inc. operates natural and organic foods supermarkets. Its stores offers produce, packaged goods, bulk, frozen, dairy, meat, bakery, prepared foods, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins, body care, pet foods, grocery, and household goods. The stock currently has a dividend yield of 1.6%. WFM has a PE ratio of 23. Currently there are 3 analysts that rate Whole Foods Market a buy, 2 analysts rate it a sell, and 12 rate it a hold.
The average volume for Whole Foods Market has been 6.1 million shares per day over the past 30 days. Whole Foods Market has a market cap of $11.0 billion and is part of the services sector and retail industry. The stock has a beta of 0.79 and a short float of 14.2% with 7.96 days to cover. Shares are up 0.4% year-to-date as of the close of trading on Wednesday.
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rates Whole Foods Market as a
. 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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and deteriorating net income.
Highlights from the ratings report include:
- WFM's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
- The change in net income from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income has decreased by 10.7% when compared to the same quarter one year ago, dropping from $159.00 million to $142.00 million.
- WFM has underperformed the S&P 500 Index, declining 19.53% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full Whole Foods Market Ratings Report.