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WFMI drops 15% in one day!

posted Nov 8, 2009, 6:55 PM by Mohit Kumar   [ updated Nov 8, 2009, 6:59 PM ]

WFMI drops 15% in one day!

Last week, our top performing pick WFMI dropped 15% in a single day, taking our current  returns down from over 210% to around 170%. The cause was nothing more than a guidance for 2010 which did not impress the investors and analysts enough. Analysts were expecting earnings of $1.11 next year, while WFMI guided just a cent or two lower. This is of no significance to long term investors like us and we continue to remain bullish on WFMI. What is more important to us is that WFMI had an excellent quarter with more than $50 million in free cash flow. There has also been an improvement in sales trend and a rise in same store sales.

Regardless, it is natural to feel a bit low when any of your stock tanks down over 15% in a single day. But hey, we should have very little to complain as we still continue to sit on a gigantic gain, considering the economic situation we are in. Hence, we are calm and will continue to hold WFMI.

Stay tuned for our next addition to the portfolio which would be coming soon!