Well said, my friend. All those goodies handed out to shareholders did not take my eye off the ball, but cemented my belief that this stock was(and is) a bloated pig.

hubris12000,

I see that you are still making the same false and vicious accusations about Whole Foods that you have been making for many, many months now.

1. Whole Foods paid out a special dividend not to boost the stock price, but to increase their EVA by eliminating excess cash from their balance sheet which they don't need for their growth. This move will increase their EVA and their ROIC despite lowering their EPS (because less interest income will be produced). Since you still can't read a balance sheet or cash flow statement you don't seem to be aware that Whole Foods is producing far more cash than they need for their expansion.

2. Your statement "only the retail longs are holding now" is a false statement. Institutional Investors continue to own 88% of all outstanding shares.

3. Whole Foods has been competing against and gaining market share from Wal-Mart, Costco, Ralphs, Safeway, Albertsons, Kroger and anyone else you care to name. Whole Foods is evolving their business model faster than any of their competitors are. That is why their same store sales were 13% last quarter, 11.3% the past 9 quarters, and over 10% for the past 5 years. The simple economic facts couldn't be more clear because Whole Foods same stores sales are increasing and not slowing down.

4. You have ZERO evidence or facts to support your claim that they "will soon announce what the smart investors know, decreased goals, decreased earnings forecasts, slower pace of store opennings, etc." I find it fascinating that you continue to make your silly predictions without any facts, evidence or logic to support them--only your own hopes and fantasies.

hubris12000--you now have only 280 days left to participate on this Board. Enjoy them while you can. My margin of safety is now over 15 points.

Are you actually that naive? You can't really believe Whole Foods paid a special dividend to increase their EVA. I don't think you even know what the term means.

It is simply hogwash to plan on openning 30-40 stores a year, while simultaneously paying a special dividend. Hell Warren is sitting on Billions, looking for acquisitions, that he has not even identified yet!

Do the Los Angeles Lakers compete against the UCLA Bruins? They both play basketball. Please don't answer Deb - rhetorical.....Point being, up until a few quarters ago Whole Foods was like a pimple on the ass of Wal Mart, Kroger, et. al. and then they went and got all arrogant and egotistical on them. And now they have pissed them off. Now they have a fight. Just just how do you think the high flying Final Four UCLA Bruins would fare against the Lakers? They would get their college asses kicked. And that is EXACTLY what will happen to Whole Foods, now that the fight is on.

When faced with a full frontal assault Whole Foods will be forced to make changes, namely lower their prices, ( and I might add it is about time ). They will be squeezed, and service will deteriorate. They will not be able to continute being all things to all people. They may have to scrap their prepared foods all together. It is so @#$%ing obvious, and you just won't open your eyes.

The game has changed Deb.

Michael

Do you really think WMT's business plan is based on someone getting arrogant and egotistical and pissing them off? What are you, in high school? Sorry, you're a fool.


>>>>Whole Foods was like a pimple on the ass of Wal Mart, Kroger, et. al. and then they went and got all arrogant and egotistical on them. And now they have pissed them off. Now they have a fight.

hubris12000,

You are the one who is both foolish and naive. Yes, of course Whole Foods paid the special dividend to increase their EVA. As incomprehensible as it may be to you, Whole Foods management doesn't manage the business in terms of the short-term stock price. I doubt they even look at it more than once a month or so. You would know this is true if you had been following this company as I have for the past 14+ years. This company is being managed for the benefit of the long-term investors, not short-term speculators like yourself. Whole Foods entire leadership team from store manager on up has their bonuses calculated based on the increase in EVA that they produce. The higher the EVA the higher all of their bonuses are. Whole Foods uses a 9% cost of capital in their EVA calculations which is equal to about 15% on a pre-tax basis. Therefore any cash on their balance sheet is being charged against their NOPAT (net operating profits after tax) at 9% clip while earning only about 3% after tax. That is a 6% spread between the cost of capital and the earning power of the cash if it sits idle. The bottom line is that excess cash lowers EVA which lowers management bonuses. Mackey has said over and over and over on Whole Foods conference calls that excess cash beyond their growth needs will be returned to the shareholders either through dividends or stock buybacks in order to increase EVA. The special dividend and announced stock buyback is merely walking the talk.

hubris, you seem to believe that you are a better expert on Whole Foods future cash flow than company management is. What is that based upon? Whole Foods needs to produce about $400 million in cash to open 40 stores--$10 million per store. They produced $410 million in operating cash flow in 2005. As they open more stores their operating cash flow is going to increase at about a 20% clip, therefore doubling to $800 million in about 3.5 years. Let's see now--they need about $400 million to open 40 stores while they'll be producing $800 million in operating cash flow in 3.5 years. Do the math, Einstein. They are producing much more cash than they need. They don't have any debt. The excess cash is going to drive EVA and management bonuses down. The solution is obvious--return the excess cash to shareholders.

Your analogy with Warren Buffett is deeply flawed. Berkshire is an investment vehicle similar to a mutual fund. Excess cash will not sit idle for long at Berkshire because Buffett keeps investing it. In contrast, Whole Foods is simply a rapidly growing food retailing company. They aren't going to invest their excess cash in Coca Cola or Geico Insurance.

Whole Foods has been competing against all the companies you've named for over 25 years now and they've been winning for over 25 years now. These are the simple facts which you continue to ignore. Let me know when Wal-Mart, Safeway, or Kroger actually begin winning this competition with Whole Foods. It hasn't happened at any point for the past 25 years. It isn't going to happen this year or next year or the year after. Whole Foods had 13% same store sales last quarter and I predict they continue producing double digit comps or close to them for the rest of this decade.

The game has indeed changed and Whole Foods is winning it. Open your eyes hubris. Look at the facts with unbiased eyes if you are capable of doing so.

(continued on next post)

I read your follow up post. What a ridiculous and biased article written by someone with an obvious axe to grind (much like yourself). It is so full of inaccuracies and fallacies that I wouldn't know where to start in demolishing its arguments. Life is too short to argue against people in the co-op movement who think "food is for people, not for profit" or that finding the "cheapest food in each category" is a fair way to do a comparison between Whole Foods and Wal-Mart (since most of the cheap crap that Wal-Mart sells would never meet Whole Foods quality standards to be sold). Believe these negative articles if you want to. In the meantime, Whole Foods will continue flourishing and there isn't a damn thing that you, Kroger, Safeway, Wal-Mart, or "The People's Market" can do about it.

You've only got 280 days left on this Board, hubris. My margin of safety is over 15 points.

Deb,

Why do they not buy the land the stores sit on? Would that not contribute to the long-term EVA in terms of reduced lease expenses?

???

Geoge Mason baby.

yhoo id tracking,

Here is what you quoted me saying and accused me of lying about:

"Why shouldn't OATS sell too many conventional products? It alienates the core natural foods customers who believe in the mission of natural/organic foods. OATS is now a supermarket retailer who just happens to sell natural and organic foods. They have lost their sense of mission for the business and in losing their mission they have also been losing their core customers dedicated to that mission. Whole Foods, in contrast, is mission driven to its core and that dedication to mission gives them an authenticity and a commitment from their core customers that drives their sales ever upward.
OATS says the decision to sell more conventional products is due to the results of a survey. 2 points here:

1. Mission committed companies fulfill their mission regardless of what surveys say. OATS is proving to their rapidly dwindling core customers that their mission is only skin deep and that they have no real commitment to it.
2. A couple of years ago OATS said that a "survey" of their customers convinced them to eliminate many redundant products. It didn't work. Now a new "survey" is telling them to add additional products.

OATS has lost their way and no longer has a sense of mission or even a well thought out theory of the business. They lack a viable business model that they can replicate. They are floundering around hoping to find a viable strategy that may stop their erosion. Problem is is that they lack the time and the capital now. Whole Foods says they will open 25 stores in OATS territories in the next 2 years. The average Whole Foods store in development is now about 50,000 sq. ft.--twice as large as the OATS stores that they will be competing with. The writing is on the wall. The end game is now underway for OATS. It will just take a couple of years to play completely out."

I stand by all of the above statements. I told no lies. I still believe that OATS doesn't have a viable business model and that Whole Foods is systematically destroying their viability as a business--market by market, city by city. The rise of their stock price merely reflects speculative fever on the Burkle buyout--not successful growth or earnings.

You can attack me and call me as many names as you wish to. What you are incapable of doing, however, is refuting my arguments.

Living proof there is nothing funny about mental illness. I think he's gonna blow at any minute Raho. He couldn't debate the time of day. Please quit embarrassing the board psycho.

I will pray for you.

I think you should buy Oats and short WFM, makes perfect sense to me....

Lets us know how your investments goes!

I can think of someone I would put on ignore, but the daily comedy of some of the things you say is too much to give up.

yhoo id tracking,

I'm up 3,0000% on my Whole Foods investment. How much are you up on your OATS investment?

yhoo id tracking,

I've answered every question you've put to me, but you've answered none of mine. Why is that?

>Is that an admission that you where wrong about telling people to sell OATS at $6?

You seem to be putting words in her mouth, as I can not find where she said "sell OATS".

She spoke about the health of the company, and did not speculate on the future of the stock price.

If you think otherwise ****find the quote***, and stop dancing around the point that doesn't seem to exist except in your mind.

yhoo id tracking,

1. I'm still waiting for the evidence that I told people to sell OATS at $6.00. Despite 2 previous requests you have yet to provide any.

2. I'm still waiting for the evidence that I "tried to talk down OATS stock". You have yet to provide any.

3. You seem to be incapable of distinguishing between a stock and the company itself. My criticisms of OATS have all been based on its terrible performance track record--$81 million in losses over its 19 year history and $33 million over the past 3 years.

4. You continue to attack me personally by calling me names, but you never answer my arguments.

Oats owns Henry's in San Diego and they sell anything but All Natural Food. For a company that promotes itself as Natural and Organic and then buys a company that sells products that are not all Natural, shows they are not in the business of Natural and Organic and it also shows they will do anything to make money.

Yhoo_id_tracking go away, you are not in the same league as Rahodeb. Point by point Rahodeb has reduced your arguement to an unsubstantiated opinion.

Do you realize that Oats made money for the very 1st time last quarter?? The stock had no where but up to go, or out of business, which almost happened. It is around 18 bucks and do you think you are going to make money by buying Oats at that price, the answer is no freak'in way!!!
If you were smart you would by WF at 65.00, and hold for as long as you can. With just one good announcement you will see at least 10 bucks and if they hit 2 in a row, well over 90 dollars per share.