Big Moat Stocks (formerly Rule 1 Numbers)

Whole Foods (WFMI) was one of the stocks that big-moat used often as an example in the Big Moat book. Here we are a few years later and the outlook for WFMI has changed a lot. We’ll start by looking at the 2 year chart.

Looking at the chart shows an obvious downward trend which means we’re not going to be going long anytime soon. But maybe this means the stock is getting close to the margin of safety price. Take a look at the Big Moat analysis for WFMI below, click the thumbnail to view the full size image.

The numbers are OK, but not great. Equity growth was non-existent over the last year. But still, if this is one you’ve been following for a while and you understand the business, it might still be on your list for an investment. You’re just waiting for the price to have that margin of safety and for the trend to start back up.

The real question though, and this is the main reason for this post, is what about management? For years, the Whole Foods management was seen as the cream of the crop, but now it has become public that the CEO was posting negative comments in message boards about Wild Oats, a competitor, for years. This certainly isn’t something negative to the degree of cooking the books like Enron, but is it enough to make you question an investment in Whole Foods?