Lioness Associates, Inc.

Economic & Corporate Risk/Yield Reports

October 31, 2012  -- Whole Foods Market Risk/Yield Update for 2012

Refer to Reading Graphs for information on interpretation of the graphs.

As noted previously, the October/November period is marked by a core movement into risk while the transient movement is into yield. This indicates that there may be a sideways movement in stock price as there is likely no clear direction. With voting set for Prop 37 in California next week, either result will likely jolt this stock out of it's current trading range.

If the proposition passes, it could place Whole Foods Market as the frontrunner in California for providing the choice of foods that consumers want (after they read the labels) and as some may have heard "where California goes, the nation goes.  But, is all this true — recent stirrings (
see article) indicate that there may be more to the story as in ... Whole Foods Market supports the proposition but, with reservations.  Many of the investors in Whole Foods Markets are also investors in companies that are donating heavily to keep the proposition from passing.  A notable fact is that Whole Foods Market has not donated money to support the proposition (see article).   And apparently, Whole Foods Market also has GMO foods in its stores (see article).


May 4, 2012 -- Whole Foods Market Risk/Yield for 2012

Whole Foods Market just released earnings and Wall Street likes the numbers (read more here), at least for now.  It's worthwhile to note that this stock has been a high-flyer before and that was back in 2005. At that time, the stock lost value from 2005 into 2007 as the same store comps went from an estimated 11 - 14.9% down to 6 - 8% (read article here). This same scenario is not likely to happen again but, there might be some re-adjustment of numbers as new stores are increasing while the existing competition is also moving into the same areas.

This company does seem to have the formula for what works in the "good food category" and as shown in the WFM Delta Core/Transient 2012 graph, the stock is likely to stay in the "yield" area through most of the summer.  It's worthwhile to note that one astrological configuration that has been helpful to this company since the beginning of the 2012 year will be fading out in July.  There are likely to be some "growing pains" showing up in August possibly either due to the number of new stores planned or the locations that were selected. 

Looking further out in the 2012 year, there might be new regulations (read article here) regarding GMO and labeling that might impact "organic" grocers.  Hard to tell the potential impact at this time but, it could be significant.  We'll come back and revisit this company's potential again in the summer.

      WFM Delta Core/Transient 2012 graph

        WFM Risk/Yield 2012 graph

Disclosure as of 5/4/2012 - Whole Foods Market (WFM) is not part of our portfolio at this time.