Cramer Cautious on Whole Foods (WFM) as Stock Transitions from Growth to Value

Whole Foods Market, Inc. (Nasdaq: WFM) had a rough Wednesday following its Q1 earnings report, falling over 18 percent on the session.

Jim Cramer also aired caution on the high-end grocery chain yesterday, saying that it was best to wait a while before adding Whole Foods to your portfolio.

Cramer noted that Whole Foods is a best-of-breed operator within its space, a positive, but that the company has also guided lower multiple tims this year, an obvious negative.

When this happens, Cramer thinks analysts will begin assigning a lower multiple to an inconsistent operator like Whole Foods is starting to become. Currently, the stock trades for around 24 times earnings, while the average supermarket goes for about 16 times.

While Cramer still has faith in Whole Foods, the transition from growth to value has the venerable investor on the sidelines. Shares of Whole Foods are up 0.4 percent.

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