Talk about your organic growth! Shares of grocer Whole Foods Market (WFM) surged nearly 10% after the company reported results late Wednesday that were far better than estimates.
The rally has to be considered vindication for anyone who stuck with the stock after it got pummeled Friday following a disappointing report from Chipotle Mexican Grill (CMG). Shares fell 7%.
That sell-off was silly. I even called the dip in Whole Foods on Friday my Stupid Stock Move of the Day. The argument last week seemed to be that rising commodity costs might hurt Whole Foods. Some also seemed to try and suggest that the hipster urbanites who often frequent Chipotle may be slowing down their purchases due to the weakening economy -- and that they might be pulling back on buying pricey food too.
So far at least, those fears appear to be for naught.
Other traders were quick to point out though that the strength in Whole Foods may not necessarily mean the consumer has sprung back to life. Investors have to pick retail and consumer products stocks wisely. Companies like Hershey (HSY) and Colgate-Palmolive (CL), may also be attractive for example.
At the end of the day, Whole Foods might simply be a must-have for consumers ... even if they are worried about the overall economy.
That is high praise. Now excuse me while I go step out for some sushi at Whole Foods followed by an iced skim caramel latte at Starbucks (SBUX) for lunch.