Whole Foods Market, Inc. (WFM): 1 Stock to Buy for February

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On Monday of this week, I introduced Fools to five companies that I was considering adding to my Roth IRA. I’ve been doing this — picking out one stock per month — for about 18 months now. My picks are averaging a 14.3% return since I started, which is outperforming the S&P 500 by more than 2 percentage points .

Read below to see which company made the cut, and at the end, I’ll offer up access to a special premium report on the business.

Whole Foods Market, Inc. (NASDAQ:WFM)

Those that didn’t make it
Of course, before telling you which company I’m buying, I wanted to let you know why the other four companies didn’t make the cut.

First, there’s Apple Inc.(NASDAQ:AAPL) . I’ve voiced long-term concerns over my holdings of Apple before. To keep it short and sweet, I’m worried about the long-term effect the loss of Steve Jobs will have on innovation at the company. Sure, there have been some big hits since his death, but he likely had a big hand in those developments. I’m waiting for a post-Jobsian product to come out before buying shares again.

Next we have Baidu.com, Inc. (NASDAQ:BIDU) — the Chinese search engine that has grown revenue by 63% per year over the past five years, and grown earnings per share by 75% per year over the same time frame; and it trades for just 24 times earnings. I still love this company, it’s just that, at this point, it accounts for over 20% of my IRA — that’s too much.

And when it comes to the other two companies I offered up — Intuitive Surgical, Inc. (NASDAQ:ISRG) and Google Inc (NASDAQ:GOOG) – I can’t find much reason not to buy them — other than the fact that I like the company I’m buying even more.

My stock to buy for February
That means the stock I’ll be buying this month is Whole Foods Market, Inc. (NASDAQ:WFM) . There are a lot of reasons to like this company, but I’ll be zeroing in on just two of them: the company’s long-term operating performance and the sustainability of the organic movement it is benefiting from.

First, let’s focus on the numbers. Since the depths of the Great Recession hit in 2009, Whole Foods has been able to increase revenue by about 13% per year. That’s not bad when you consider that between 2000 and 2010, total food sales in the U.S. grew by just 3.05% per year. In other words, Whole Foods is growing revenue over four times faster than the entire U.S. food market.

Even more pleasing for investors is the fact that the company has grown earnings per share by a whopping 44% over the same time frame. The main reason the company has been able to do this: expanding its net margins from 1.48% in 2009 to 3.98% today. In other words, the company now keeps 2.7 times more of every dollar it brings in to bank as profit. That’s an amazing improvement in just three years!

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