Williams-Sonoma, Inc. (WSM), Whole Foods Market, Inc. (WFM), The Fresh Market Inc (TFM): Solving Obesity One Dish at a Time

Another plus is that Whole Foods Market, Inc. (NASDAQ:WFM) employs “mongers”: cheese, fish, produce, and meat sales force that know their wares and are helpful to customers suggesting preparations and sides, even wines.

Analysts have been dismissive of Whole Foods Market, Inc. (NASDAQ:WFM) opening stores that have smaller square footage and more affordable prices. Pollan advocates buying direct from farmers but Whole Foods makes that more convenient with its strong commitment to local sourcing. Not everyone wants to join a CSA or drive to the country. These smaller stores fill a need for their smaller communities.

The stock after its pullback from its high of $101.86 trades at a Whole Foods Market, Inc. (NASDAQ:WFM) Paycheck pricey 33.43 and a PEG of 1.65. It offers a .90% yield. Socially responsible investors need have no qualms about this company as it’s a pioneer in employee benefits and GMO (genetically modified organisms) labeling and fair trade sourcing. Corporate governance risk score is an excellent 2.

The stock has underperformed the S&P 500 this last year, up 5.70% but the share price decline has shaken out shorts and at a 2.10% interest is declining.

Alternatively, The Fresh Market Inc (NASDAQ:TFM) could nourish your portfolio. It operates 130 specialty grocery stores in 25 states. It’s smaller than Whole Foods with its 340 stores in the US, Canada, and the UK. The Fresh Market Inc (NASDAQ:TFM) stores are akin to Whole Foods and offer cooking lessons. My local store is offering a class on curry meatballs and vegetable curry, for example.

The Fresh Market Inc (NASDAQ:TFM) is down 25% over the last year following two consecutive disappointing earnings releases. Its P/E is 30.68 with a forward P/E of 21.47. The PEG is the best of these three at 1.28. However, it has the highest short interest at 10.28%. Its median price target is $48.00. Analysts expect sales growth in the mid-teens near term.

The Foolish foodie takeaway

Of all three, Williams-Sonoma, Inc. (NYSE:WSM) is my favorite. If cooking at home doesn’t pan out (pun intended) it still has 75% of the business linked to a housing recovery. The company is buying back shares and increasing the yield.

Whole Foods Market, Inc. (NASDAQ:WFM) is my preference over The Fresh Market Inc (NASDAQ:TFM) until Fresh Market manages a beat on top and bottom line. Pollan’s take on cooking at home comes at a crucial time for the US and these stocks are the preferred way to play it.

The article Solving Obesity One Dish at a Time originally appeared on Fool.com and is written by AnnaLisa Kraft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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