Whole Foods Continues to Slide
Aug
22
Written by:
8/22/2008 4:34 PM
Whole Foods Market Inc (WFMI) finished the week with a
little uptick as volume spiked at the close on Friday but the weeks chart looks
similar to Freddie Mac (FRE). Of course Freddie Mac dropped 43% this week while
Whole Foods only dropped 6%. But the continued slide looks similar.
Whole Foods Continues
to Slide
Whole Foods Market Inc (WFMI) finished the week with a
little uptick as volume spiked at the close on Friday but the weeks chart looks
similar to Freddie Mac (FRE). Of course Freddie Mac dropped 43% this week while
Whole Foods only dropped 6%. But the continued slide looks similar.
Love the Stores
I like the stores themselves although
its customer base is the high end consumer which could be shrinking as consumers
look for bargains at stores like Wal-Mart (WMT) or the same.
Fundamentals
Analysts have downgraded the
earnings slightly over the past 90 days from 0.28 a share down to 0.15 a share.
And the company has missed their last four earnings estimates, which is never a
good sign. Sales are expected to grow 22% this year while earnings take a
tumble down 31% year over year.
The Trade
There’s a lot of short interest in
the stock, currently 19.7% of float. So being long the stock could provide a
short squeeze if there’s any kind of positive news from the company. Yet the
overall economy is not improving, inflation is staying for the time being, and
Whole Foods Market is going to struggle for the foreseeable future.