[CANSLIM] Whole Foods Markets

From: "Kelly Short" <kelly.short@fw.us.neoris.com>
Subject: [CANSLIM] Whole Foods Markets
Date: Tue, 8 Oct 2002 14:45:28 -0500
Next Article (by Subject): RE: [CANSLIM] Whole Foods Markets "Mike Gibbons"
Top of Thread: RE: [CANSLIM] Whole Foods Markets "Mike Gibbons"
Next in Thread: RE: [CANSLIM] Whole Foods Markets "Mike Gibbons"
Articles sorted by: [Date] [Author] [Subject]
Read a review of Wholefoods Markets today from Fool.com (which I know =
immediately makes it suspect since analysts are usually wrong, but what =
if...). Their review of the company's performance looks impressive but I =
haven't performed DD yet. The industry and "M" stink (did ya'll know =
that?) but perhaps it might be one to keep on a long term list. I've =
included the text of the review from Fool.com below as well as a =
screenshot of WFMI from cwhCharts.com (all at once- "thanks Mike!") =
accessible from this link: <http://www.kellyrshort.com/canslim/wfmi.gif> =
(37k) (See disclaimer information below)


WFMI Review:

Whole Foods Market (NASDAQ: WFMI), founded in 1980, is the world's =
largest supermarket retailer of natural and organic foods -- which is =
among the fastest-growing segments in the food industry. The company has =
stormed through nine consecutive quarters of +20% sales growth...it has =
generated more than $150 million in free cash flow over the past =
year...and it is richly capitalized at $2.5 billion.=20

What's more, Whole Foods' management, financial discipline and corporate =
disclosure are superb. That's why this is one of our favorite stocks =
today, and one we recommend to you without reservation. Let's take a =
look at these three key variables:=20

1. Management. Whole Foods' Chairman and CEO, John Mackey, has led the =
company since he founded it in 1980. His tenure is complemented by =
Glenda Flanagan's -- she's been CFO since 1988. The executive officers =
are experienced but young, with all but one under the age of 50. And, in =
a marketplace rife with disgustingly excessive executive compensation, =
there's comfort in knowing that Whole Foods' executive salaries are =
capped at 10X that of the average store worker.=20

The result is enduring leadership driven around a mission and core =
values that are actually believable. (In an age where Enron's 2000 =
Annual Report listed "integrity" as a core value -- promising to "work =
openly, honestly and sincerely" -- you can't be too careful about this =
one.) For five years running, Whole Foods has been ranked among Fortune =
magazine's Top 100 places to work in America, and all of our research =
shows that this is a strong, honest management team with a solid =
business plan.=20

2. Financial Discipline. Retail chains notoriously do a poor job of =
planning their expansions. Most over-accelerate store openings, often to =
cloak mediocrity at long-standing locations. Contrast that with Whole =
Foods. The company has consistently posted same-store sales growth while =
expanding locations by 10%-20% per year through acquisitions and store =
openings.=20

What's more, the beauty of Whole Foods is evident one step below =
announced earnings (which logged in at $67.9 million in Fiscal 2001) -- =
down in the cash flows. Its 131 stores (going to 150 this year) are run =
more efficiently than ever before, with an increasing number of =
customers paying high-end prices for natural, healthy foods. Operating =
cash flow for the second quarter of 2002 was a whopping $75 million. The =
company also maintains high margins relative to other retail =
supermarkets, exercises very tight management of its inventory and has =
kept its debt under control.=20

3. Corporate Disclosure. On its web site, Whole Foods offers transcripts =
of its last 14 conference calls, a spreadsheet breaking out the =
economics of new store openings, and access to all of its financial =
filings. Corporate America should take note: Whole Foods' filings are =
clearly presented and highly readable! Full disclosure is a requirement =
in today's turbulent market (we won't recommend a single company that =
doesn't pass this critical test), and Whole Foods has got it!=20

In the quarter just reported, Whole Foods' numbers were outstanding: =
Sales grew 21%. Gross margins rose fractionally to 35. Cash rose, and =
debts fell. And management reports that it is looking to have 400 stores =
and $10 billion in sales by 2010!=20

Fool.com: 1999-2002 Phillips Investment Resources, LLC. All rights =
reserved.
cwhCharts.com: cwhCharts.com; trademark information available at =
webmaster@cwhcharts.com
Investors Business Daily: You're not mentioned here, so I'm not going to =
advertise for you.



- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.
Go to Jeff Salisbury LWGate Home Page.