Do you think Whole Foods stock will rise?

Question

I'm an amature investor trying to learn the market. I bought when it was in the mid 40's back in May and now it's dropped 10%...If I hold for atleast a year, will I atleast gain it back?

Answer 1

I'll try not to lecture you and just present the results of my analysis. I'm sure that you don't want your nose rubbed in the mess that WFMI has made for you because it missed the last earnings report and gapped down right after you bought it. Sometimes you need a little technical analysis rather than common sense.

It does appear that WFMI is seeking a bottom at 38. It's tested this bottom on 6/12, 6.26, and today 7/6. There was a higher than average up volume today, which is a good sign, expecially on a holiday week. WFMI has a low debt/equity and a very good 5 year earnings growth record. They're going through a tough period now as is the Grocery Industry in general.

The next earning report is due on 7/31. Watch this report carefully and listen to the CEO and board as they present the results of the quarter. You can tell a lot by listening to these guys live...

http://www.fulldisclosure.com/company.asp?client=cb&ticker=wfmi

If WFMI can beat the .35 estimate, I think the stock will take a positive bounce. Don't think that I'm trying to sugar coat WFMI, they have an uphill battle to close the gap between 42 and 45 and it may take several quarters for this to happen.
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Answer 2

The company's growth has slowed, and the stock's PE and PEG show that the stock might still be a bit on the expensive side. I wouldn't count on it doing too much in the very near future.

As an amateur investor, be careful that you don't fall into the "I don't want to lose money" trap. Sometimes it's better to take a loss and move on to something better than to hang on to a loser hoping that you eventually get your money back. Let's take the scenario you just gave... you hold on for a year, and the stock rebounds back to the price you paid. Wooohoooooo... you've had your money in the market for a full year, and you've earned... NOTHING! It would probably be better for you to sell this holding for a loss, put the remaining money into a stock that had a better chance to perform, and see if you can MAKE money instead of simply NOT LOSING it.

One way to decide whether or not you should continue to hold a stock is to ask yourself, "If I didn't already own this stock, would I buy it now?" If the answer is no, I'd sell and move onto something I wanted to own at this point.

Answer 3

Whole Foods is a company that chnaged the game for a while. Now that the playing field has leveled out a bit, and other stores are offering more health foods they will have to fight harder. The most recent reason the stock is down is because the company is not making good margins right now. It's beaten down right now and will be for a quarter or two. It will come back but it might not have the same growth as it once did. I could be wrong since there's only about 200 stores. If you get in you have to be looking on at least a two-year term.

Answer 4

I think you'll see Whole foods go up or down. Some days it may just do that.. or not.

So..... You buy a stock without any real idea of what it's all about. You don't even have an exit strategy (major mistake). Now you're asking strangers for financial advise. You have no way of verifying their qualifications or motives. How is this really going to help you?

I held Whole Foods and made a small profit. I had a tight stop on it to protect my gain (since the fundamentals were so poor). I'm not an investing smarty. I'm simply doing my investment homework better than you!

Anyone that tells you this stock is going to rise doesn't know what they're talking about. Anyone that tells you this stock is going to go down doesn't know what they're talking about.

Part of investing is knowing what type of loss you can take and how long you're willing to wait. Some people would get out simply because they're are better stocks to get into right now... instead of having "dead money".

Also.... learn "ASSET ALLOCATION" and "Money Management" as they refer to stock investing.

READ AS MUCH AS YOU CAN. You don't learn investing by gambling on a stock..... and that's what it sounds like you've done.

Answer 5

Probably Not. You will probably lose more.