November 4, 2006
A Look at WFMI’s After-Hours Action
Whole Foods blew up on Thursday afternoon. Another good example of where paying attention to after-hours action could have made you a pretty penny.
Bank of America analyst Scott A. Mushkin cut his 12-month price target for the shares from $77.50 to $43 and also reduced his estimates of how much the company will earn the next two years.
“Cut” doesn’t quite cut it here… how about slashed! 45% revisions deserve at least a “slashed.”
Related: The End of Whole Foods’ Fabulous Run, or, Pass the Mac & Cheese Please (Aug. 10, 2006)
Cat: | Time: 9:45 am (utc+8)
November 5th, 2006 at 12:48 am
Any time a stock with a great chart that merely reflects a company doing darn good business qtr after qtr that blows up…well, all I can say is it’s a damn shame.
You know, roughly about the time Whole Foods stock was making multi-year highs, the major media outlets were buzzing about its corporate culture, how the CEO was only paying himself a measley yearly salary, sweeping floors, and how well the employees were treated, blah, blah, blah. I don’t visit the newsstands that often, but I figure the CEO’s face was on a cover of a business mag about that time.
There is no question that in the grocery business, with its 1 to 1.5 percent margins, the 8% margins Whole Foods was making had to be due in large part to folks willing to pay a needless markup for the privilege of bringing home, say, a $20US box of mixed organic nuts.
To my knowledge, Wild Oats is the only other public US competitor to Whole Foods. It was losing money qtr after qtr while Whole Foods was going gangbusters. It is only until recently that Wild Oats turned a per share profit for the first time in years.
I didn’t listen or read about what Whole Foods mgmt said about what it would do to keep growing its business.
Obviously if Whole Foods admits its having trouble getting repeat business it also means the suppliers will see revenues decline.
No matter. It’s apparent rising energy prices and falling interest rates, the housing bust and probably a couple of other macro economic events spooked the folks who can afford that overpriced stuff.
January 20th, 2007 at 9:39 pm
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