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No. of Recommendations: 10
Hi lerej,

Why would I not sell them?

1. Their price to sales ratio and price to earnings ratios are very close now to Kroger's and Safeway and other traditional grocery stores. They produce nearly twice the revenues per square foot as tradional grocery stores.

2. Their earnings went down, but $0.03 was due to the Wild Oats acquisition which gave them 58 stores that are producing an average same store sales growth of 7%, so I expect in time this acquisition is going to be profitable for them and fewer charges will be announced.

They loss $0.09 over the last year, so that reduced earnings some too. They expect that their UK business will break even by 2011, similarly to how their Canadian business did.

3. Even if their produce is higher to buy, their prepared foods are certainly cheaper than eating out at restaurants and healthier, plus you can eat them there or take them home. I think this part of their business may shine going forward.

4. Everything I read about organic trends suggest they are still growing at a fast clip and I expect WMFI will get their fair share of those sales.

I think they are going to do well in the future and I also think Starbucks will do well. I like buying strong brands when their price is dropping. I don't know if I am good at picking the bottom, but I think accumulating them in a balanced way over time at better value points is a great way to invest for the future.

tom e
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