Patrick Horan Whole Foods Market Inc. WFM-Q BUY Apr 01, 2015

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.

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.

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.

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.

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.

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

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%.

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.

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