Stock predictions from 2 years ago

Stock predictions from 2 years ago

The Motley Fool is a website that I like to keep one eye on. They do a good job of explain current trends in the markets; why the big guys like Warren Buffet invest like they do; and what companies to think about putting your money towards. And there is always a paragraph on the bottom disclosing whether or not the author of the post has any personal stake in the companies.

A couple of years back, an interesting article came out talking about 3 brands to keep an eye on: Wholefoods

From 2012, here was the comment:

In a week of horrific earnings reports, Whole Foods Market (Nasdaq: WFM  ) was a bright spark. The grocery chain increased sales by 11% and earnings per share by 28%. It beat Wall Street’s expectations, and the stock was rewarded with a 12% increase, jumping up to $94 by the end of the day. That sales growth came from a focus on bringing quality products to consumers and then charging them a premium for the quality.

The wonderful surprise is that customers continue to be happy to pay up for quality. Same-store sales rose 8% last quarter and are on track to exceed even that growth in the next quarter. Gross margins were 36%, which is a slight shade better than competitors have been able to manage.

Since that article was written, Whole Foods stock has gone down slightly in value. But if I were holding on to some shares, I wouldn’t be selling them just yet. Why not? Because I agree with the author’s conclusion about Whole Foods:

Whole Foods sells quality, so it doesn’t need to compete on price in such a self-destructive manner. This is a common theme among the companies we’re looking at here — sell quality, and you can name your price.

Let’s see where it is in another 2 years. Over the long run, I think that quality will always be a good investment.

What companies will you be watching for the next 2 years?

Click here to read the full article from 2012.

 


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