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November 10, 2005
All boats will sink, including WFMI, Thurs., Nov. 10, 2005, 6:37 AM
Whole Foods Market (NDQ: WFMI) reported after the close yesterday. Forbes (Peter Kang) published a succinct report. Other stories came from AP, Reuters and MarketWatch. It makes good reading because just yesterday I was wondering if this one could defy gravity. Apparently not.
Whole Foods Market (nasdaq: WFMI - news - people ) reported sales of $1.12 billion in the fourth quarter and announced a special dividend of $4 per share. In after-hours trading, shares were initially up 7% but pulled back sharply to a decline of 3%. Whole Foods reported earnings of 13 cents per share, not comparable with analysts' estimates of 53 cents per share. In addition, the company's board approved a 2-for-1 stock split with shareholders of record Dec. 12 to receive an additional share on Dec. 27. Prudential Equity Group reiterated a "neutral weight" rating on Whole Foods on Sept. 26 with a $112 price target. "Ultimately, we can see opportunities beyond food given the success that we believe Whole Foods has seen establishing a thriving brand in the natural and organic space," it said. "However, for the foreseeable future, we believe that the company needs to continue to do what has made it a great story in food retailing--that is, sell excellent quality food in superior stores with great service."
WFMI is a stock to accumulate, but as I pointed out yesterday the price is too dear.
Keep an eye on WFMI (through this interactive link) as the negatives in the company report ought to lead the share price into a decline. :-)
For an indication of how stocks are going to open in the morning after a quarterly earnings report, turn to the Nasdaq site. Here is an example for WFMI. You will see quite a difference between the $146.78 (on NDQ) and the after-hours close over-the-counter, yesterday, which was $140.90.
If you are not observant about these situations, you will end up allowing your broker to give you a fill on your order that is ridiculously off-the-market. They would do this of course to immediately flip it for an instant profit. Your ignorance is their gain.
But isn't that the way life is?
Posted by Posted by Bill Cara on November 10, 2005 06:37:41 AM | Category: 30 Consumer Staples