Whole Foods Market Inc. completed a merger with Amazon.com Inc. on August 28, 2017. Whole Foods Market stock, which had been trading on the Nasdaq Exchange (NASDAQ) since its initial public offering (IPO) in 1992 under the symbol WFM, is now listed as Amazon.com (AMZN) stock after the 2017 merger.
Main Takeaways: How to Buy Whole Food Stock
- Step 1: Pick a broker. We recommend Webull, E*TRADE and Ally Invest.
- Step 2: Open a demo account to practice trading.
- Step 3: Fund your account with a debit card, bank transfer or cleared check.
- Step 4: Place an order for AMZN stock.
Overview: Whole Foods and Stock History
Headquartered in Austin, Texas, Whole Foods Market is a unique type of grocery store chain that only sells products that meet certain criteria for being “natural.” In other words, the company doesn’t sell processed food or food with artificial flavors, colors, preservatives or sweeteners.
Whole Foods Market began when a couple of Austin natural food stores combined on September 20, 1980. The company began its expansion in 1984 by opening a store in Houston and fueled its growth through various mergers and acquisitions.
The company had opened and acquired a number of stores in Texas and Louisiana by 1992 and its IPO occurred during the same year. It started selling shares at $1.06 each. The company continued expanding by buying regional and national health food store chains, coffee companies, wine merchants and food companies. By 2017, Whole Foods had roughly 460 stores open in the United States, Canada and the U.K. before it merged with Amazon.
The Amazon merger was a $13.7 billion cash transaction and Amazon paid $42 per WFM share. WFM stock was subsequently delisted from the NASDAQ exchange and is now listed as AMZN stock instead.
Future Outlook for Amazon/Whole Foods
In February 2017, Whole Foods began closing stores: 2 in Colorado and California and 1 in New Mexico, Utah, Georgia, Arizona
You can’t buy Whole Foods Market stock since the company was acquired by Amazon. In order to buy an interest in Whole Foods, you must buy Amazon stock. At the time of the takeover in 2017, AMZN stock was trading just over $845 per share.
Since then, Amazon stock has more than doubled in value, reaching an all-time high of $2,039.51 per share in August 2018. The stock has traded in a range of $1,300 – $2,010 per share since January of 2018 and as you can see in the chart below, it looks likely to either continue consolidating within that range or decline in a correction.
Due to Whole Foods’ less-than-stellar financial results in the first quarter of 2019, Amazon’s top-line growth has slowed. On April 25, 2019, the company reported a 17% increase for revenue growth year on year, to $59.7 billion. This compared negatively to its 29% revenue gain for 2018’s third quarter and 20% rate of revenue growth for 2018’s fourth quarter. Other Amazon divisions have also shown deceleration in the rate of growth, including Amazon Web Services (AWS) and third-party and subscription seller services.
Even though its revenue growth has slowed down, that doesn’t mean Amazon isn’t making money on a net income basis. For Amazon’s first quarter of 2019, the company showed a net income of $7.09 per share or $3.6 billion, which was more than double the $3.27 per share seen in 2018’s first quarter. Amazon stock then began the year at $1,500 per share and currently trades at the $1,900 per share level, up roughly +27% year to date (YTD).
Amazon’s guidance for 2019’s second quarter anticipates an increase of 13% to 20% growth in sales — between $59.5 billion and $63.5 billion — compared to 2018’s second quarter. The company’s management also expects operating income to fall in the range of $2.6 billion to $3.6 billion versus the $3 billion seen last year.
Amazon’s financial numbers keep improving overall, which makes sense if you consider that the company has captured 47% of all online sales in the United States, although revenue growth has slowed. Still, as the company continues to expand by purchasing and consolidating other businesses, its bottom line and stock price increase and its customer base expands.
The chart below shows how AMZN’s high price/earnings (P/E) ratio correlates with improving future net earnings, eventually bringing the P/E number down and sending the stock price higher when earnings catch up. The upward trend in trailing twelve month (TTM) earnings per share could be ripe for a correction, potentially signaling lower future levels for AMZN’s stock price.
Pros of Buying AMZN Stock
- Strong financials: Amazon’s financial statements show the company’s impressive rate of growth since 2005. For example, the company made a gross profit of $2.039 billion in 2005, but 2018’s gross profit expanded to $93.731 billion.
- Continued growth: As the world moves more and more toward a digital economy, Amazon has a strong online infrastructure and a leading position reinforced by its brick-and-mortar purchases, such as Whole Foods Market.
- Highly defensive: Because of the diversity of the company, Amazon would probably not be as affected as many other companies in different segments of the economy during a strong economic downturn.
Cons of Buying AMZN Stock
- Possible stock market and economic downturn: As with most equities, a downturn in the stock market and/or an economic slowdown would adversely affect AMZN stock. Nevertheless, the company has its hand in so many different businesses and industries that the effects of a downturn would probably be somewhat mitigated.
- Antitrust concerns: Amazon’s growth has made the company a true behemoth, and it has already come under the Federal Trade Commission’s (FTC) scrutiny. While the FTC has yet to move to break up Amazon, the agency recently said it was preparing an antitrust investigation into Google’s search business that could signal Amazon will be next. Also, some Democratic presidential candidates and European regulators have called for breaking up huge tech companies with a highly dominant market share like Amazon, Facebook and Google.
- Slower growth momentum: As Amazon continues to purchase and develop its assets, the company spends more and this has slowed its revenue stream growth. If this trend continues in the long term, it could adversely affect earnings and the company’s stock price.
How to Buy Whole Foods/Amazon Stock Using a Broker
Amazon stock can be bought through any reputable broker that has access to trade stocks on the Nasdaq Stock Exchange (NASDAQ). If you plan to buy some AMZN stock to hold as an investment in a trading account for the long term, then you might want to buy it at a discount brokerage.
A discount broker would charge you a small commission, but you would probably not get access to research and information available through a full-service broker. Keep in mind that how you buy AMZN stock is just as important as where you trade, so make sure you pick the right broker.
Step #1: Pick a Broker
Before you can buy AMZN stock to invest in Whole Foods Market, you will first need to pick a reputable stockbroker.
Knowing what you need from your broker will make your choice a lot easier. If you have limited experience and would need an easy to use a trading platform with an easy to use interface and educational resources, you might be comfortable with Ally Invest or E*TRADE. If you’re trying to save money, but still want access to research and tools, you may want to choose Webull.
Check out Benzinga’s guide on how to choose a broker for more information. Here’s a quick preview of some of our favorites.
|Broker||Best For||Commissions||Account Minimum||Choose your platform|
Get started securely through Webull’s website
1 Minute Review
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit. Webull is widely considered one of the best Robinhood alternatives.
||$6.95 for fewer than 30 trades/quarter.||$0||
Get started securely through eTrade’s website
1 Minute Review
E-Trade is best known for its user-friendly browser, desktop and mobile trading platforms and its extensive research and educational information. E-Trade may not have the lowest commissions compared to discount online brokers, but customers certainly get their money’s worth from E-Trade’s comprehensive offerings.
60 days of commission-free trades with deposit of $10,000 or more
||$4.95 volume discount available||$0||
Get started securely through Ally Investment’s website
1 Minute Review
If investors are on the hunt for a bargain broker, Ally Invest could be the one. With low commissions across the board, Ally Invest (formerly TradeKing) stops potential investors in their tracks with its especially low mutual fund commissions. Commissions on stocks and ETFs are notoriously inexpensive as well, and for more active traders or those with larger account balances, commissions can dip as low as $3.95 per trade.
$3.95 per stock trade for Active Traders at Ally Invest
Step #2: Open Demo Accounts to Try Different Trading Platforms
Most online brokers provide a free demo or virtual account so you can assess their trading platform and their brokerage services, in addition to practicing trading and developing strategies. Since you can open as many of these accounts as you want, try out several brokers’ demo accounts to see which broker you feel most comfortable with and that has the features you need.
Check out Benzinga’s guides to the best stock market simulators for more information.
Step #3: Fund your Account
After you’ve opened and traded on several demo account platforms and have familiarized yourself with AMZN stock and how it trades, you’re ready to fund a trading account. As you may have noted when you opened your virtual accounts, many brokers let you open an account without funds, but you’ll still need plenty of money if you want to buy AMZN stock due to its high cost per share.
Make sure you check with your chosen broker regarding its requirements for funding an account since the minimum deposit and method can vary from broker to broker. Most stockbrokers take bank transfers, cleared checks and debit cards for deposits.
Step #4: Start Buying AMZN Stock
Once you’ve completed all the steps and have opened a funded account, you might want to watch how AMZN stock trades over a couple of trading days. Keep in mind that a share of AMZN currently costs roughly $1,900, so pick an optimum level to place your bid. It may also make sense to wait for a pullback to purchase the stock.
Is AMZN Stock for You?
AMZN has been an amazing investment for people who bought the stock when it initially started trading in 1997 at just $18 per share. Amazon as a company also comes close to a monopoly in some ways because it doesn’t really have competitors on the same level unless you consider the companies that compete with the firms (like Whole Foods Market) bought by Amazon as its competition.
Based on the stock’s price chart, AMZN seems like it may be in a correction or consolidation phase below resistance at the psychological $2,000 level and its all-time high price of $2,039.51 per share, although the AMZN chart also shows considerable support at the $1,620 level. From a fundamental standpoint, AMZN’s stock price has diverged from its trailing 12-month EPS by failing to make a new high, suggesting additional weakness may be coming.