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Whole Foods, Inc. (WFM - Analyst Report) has been a top growth story for the last few years, with shares more than doubling in price after recently topping off above $70. With another good quarter in hand and a bullish growth projection, this Zacks #2 Rank stock is a fresh take on momentum.

Company Description

Whole Foods, Inc owns and operates natural and organic food supermarkets in the United States, Canada and the United Kingdom. The company was founded in 1978 and has a market cap of $12.3 billion.

Whole Foods has been charging higher for the last few years, but shares got an extra boost in early November after the company reported strong Q3 results that came in ahead of expectations.

Third-Quarter Results

Revenue for the period was up 12% from last year to $2.4 billion. Earnings also came in strong at 42 cents, 2.5% ahead of the Zacks Consensus Estimate of 41 cents. Whole Foods now has an average earnings surprise of 8% over the last four quarters.

The good quarter was led by an impressive showing in same-store sales, up 8.7% from last year.

Dividend Increased 40%

The company used the good quarter to increase its dividend, jumping 40% to 14 cents per share.

Whole Foods is also returning value to its shareholders, with the Board approving a $200 million share buyback program over the next two years.

Financial Profile

Whole Foods has used its earnings momentum to strengthen its financial profile, with cash and short-term investments up $197 million from last year to $746 million against total debt of just $18 million.

Estimates

Estimates have been holding mostly steady, with the current year projecting earnings of $2.26 and the next-year estimate pegged at $2.59, a bullish 15% growth projection.

Valuation

In light of recent gains, WFM's PEG ratio of 2 is a premium to the benchmark of 1 for value.

12-Month Chart

On the chart, the 2-year trend is very bullish, with shares recently hitting a new all-time high. Look for support from the trend line on any weakness. Take a look below.

This Week's Momentum Zacks Rank Buy Stocks

Standard Motor Products, Inc. (SMP) has been on fire in the second half of 2011, more than doubling in price after hitting a fresh all-time high on strong Q3 results. That has estimates on the move too, providing more support and momentum for this Zacks #1 Rank stock. Read Full Article.

SolarWinds, Inc. (SWI) has seen big gains over the last few months, jumping higher with the market on strong Q3 results that came in well ahead of expectations. With an average earnings surprise of 29% over the last four quarters and bullish 13% growth projection, this Zacks #1 Rank stock is a solid pick for momentum. Read Full Article.

Pier 1 Imports, Inc. (PIR) is up more than 50% in the last three months after rallying with the market in October and posting strong Q3 results in mid December that included a big gain from last year. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is a solid pick for momentum. Read Full Article.

DealerTrack Holdings, Inc. (TRAK) has been surging for the last two months, recently hitting a new multi-year high after reporting another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is on the right track for momentum. Read Full Article.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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