Monday, June 16, 2014

Whole Foods [WFM] ready to collapse.

This is my first post on Whole Foods, ever.   By every metric that is used by Wall St to sell people stocks, WFM is a buy not a sell:

- Trailing PE 12.6, forward PE 11.9
- P/S 3.35 (well that is a bit high for a grocery store, even a foo foo grocery store!)
- P/B 1.7
- $313 billion in cash vs only $220 billion of debt
- 2.7% dividend at only a 30% payout ratio.

WHAT'S NOT TO LIKE???

Well, I'll tell you.  When tiger hunting the danger is not the tiger you can see but rather the one that you can't and there be tigers hidden in the tall grass here whether or not you can see them using the metrics fed to us by Wall Street so that we will buy over priced assets from them while they make a sales commission on them.

I'll be honest with you:  I cannot see the tiger myself.  Nonetheless, because of the Elliott wave count I am sure he is right in front of our nose in the form of PE contraction, government meddling or some other unforeseen event which is going to kill the share price of WFM.   Before you get too incredulous about it, look at the sudden collapse of a few years ago.  I wonder who saw that tiger coming?  Nobody.







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