John O'Connell, CFAWhole Foods Market Inc.WFMCOMMENTOct 16, 2012

(A Top Pick Oct 6/16. Up 43%.) Acquired by Amazon (AMZN-Q), which he had felt would happen.

Sell? Amazon (AMZN-Q) coming in was a game changer for the industry. The food industry has really been beaten up globally. He doesn’t believe there is anyone coming in over Amazon’s bid. Take your money and move on.

This has been a really tough situation. A very hostile environment. Thinks this is in the early stages of repairing itself and moving into a proper direction. They just launched 365 stores and have realized they have to lower prices to stay competitive. Dividend yield of 1.84%.

There is a lot of competition now, and he would stay away from this.

This looks good. Chart shows a beautiful support line from 2011 to now. Has had plenty of chances to collapse, but never has. Peaked out at around $68 and is now at about half price of that. Seems to have found a home at around the mid-$30.

He never tries to pick a bottom. There is tax loss selling to come. He does not know where the bottom is. He prefers KR-N.

They came into the market years ago and really took on the whole idea of organic and natural foods, but competition in the regular food stores with organic foods are affecting their earnings. This is showing up in the stock price. The stock has been falling since last February. The moving averages have all been falling. Competition is too intense.

Suffered from a little bit of a slowdown. Opened a number of stores and there has been some cannibalization of existing stores. Same-store sales growth has been somewhat anaemic, and yet it continues to trade at a very, very high multiple.

This was one of those momentum names a few years ago but has pulled back. Everybody wants to get into organics. There are the traditional grocers and all these specialty shops, so the competition is quite high now. Margins are not where they should be.

The US consumer is feeling richer now but ironically, they are not spending, they are saving. An upgrade in food tends to be one of the outcomes, so this company really hits that market. It is expensive. They have a very good concept and he has yet to see a viable competitor for them. A decent holding for the space.

Basically a Hold at best, but probably a Sell. It has had a series of disappointing guidance. There was a lot of worry about margins declining or continuing to decline because of competitive pressures. It was a great story, but right now the bloom is off the rose and he would be avoiding it.

This company was brilliant and they took an arbitrage opportunity of being 1^st with healthy/organic high-quality food. Everybody has now caught up. Grocery stores trade at 6 to 7 times enterprise value to EBITDA. This one is trading at 11 so there is still 30%-40% more downside or the other companies catch up. Valuation is very expensive.

Trend is down, trades below the 20 day moving average and underperforming the market so there must be other opportunities out there.

Has a great brand and also, when they get to an area they look to a lot of local things which has been a great benefit to them. Great story. Should continue to see very good growth in this area. Lots of room for expansion.

Sold his holdings about a month ago because it was getting expensive. Trading at a forward PE of about 32X earnings. Long-term growth is still quite high but it still puts the PEG ratio at 2 times.