I wouldn’t be jumping in on the long side of Whole Foods, either, but The Fresh Market may well be a solid stock to buy. If we take a look at the two, The Fresh Market outperforms with respect to generating returns for investors, with a return on investment that is nearly double that of Whole Foods:
Return on Investment
1). Whole Foods: 13.5%
2). Kroger: 5.6%
3). Safeway: 5.6%
4). SuperValu: -7%
5). Fresh Market: 26%
Don’t be fooled
The Global Powers of Retailing report published by Deloitte Touche and STORES shows that Kroger is the 5th largest U.S. retailer, Whole Foods the 9th, Safeway the 24th, SuperValu 31st, Whole Foods 104th, with The Fresh Market not making the list. That’s part of the reason I like it: It’s an underrated and under-the-radar grocer with room to grow.
As a believer in of the health food epidemic and the rise of health-concise consumers, it might well be worth betting on one of the top organic foods companies. While I can’t gather enough conviction to call Whole Foods a short, I would call Whole Foods a hold and The Fresh Market as a buy.
The article Is Whole Foods Worth A Short? originally appeared on Fool.com and is written by Marshall Hargrave.
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