Whole Foods Market (WFM): Stock With Unusual Social Activity

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 Whole Foods Market ( WFM) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Whole Foods Market as such a stock due to the following factors:

  • WFM has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 21.32 mentions/day.
  • WFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $225.2 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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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 1.1%. WFM has a PE ratio of 29.5. 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 3.5 million shares per day over the past 30 days. Whole Foods Market has a market cap of $17.1 billion and is part of the services sector and retail industry. The stock has a beta of 0.94 and a short float of 5.1% with 3.50 days to cover. Shares are down 5.7% year-to-date as of the close of trading on Wednesday.

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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, growth in earnings per share, increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • WFM's revenue growth has slightly outpaced the industry average of 0.5%. 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).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income increased by 5.7% when compared to the same quarter one year prior, going from $158.00 million to $167.00 million.
  • 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 30.52%.
  • 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.

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