Whole Foods (NASDAQ: WFM) is the second announced takeout of a top five Pender Value Fund holding last quarter (following the Panera deal – see our blog post). WFM is also a holding in the Pender US All Cap Equity and the Pender Strategic Growth & Income Funds. But unlike PNRA, we are pleased about this announcement.
WFM is a great company, but in our view, as an independent entity, it was no longer a compounder because its best growth days were in the rear view mirror. Nevertheless, we are always on the lookout to buy a cheap stock if we believe it can reach its fair value in a timely fashion and provide a reasonable return. WFM was an attractively priced stock because the company was going through some challenging times. Ultimately, we believed that either management would be able to fix the issues, or someone else would. That “someone else” is now Amazon.