Whole Foods (WFMI) shares were crushed in yesterday’s trading, finishing down 14% after a disappointing first-quarter earnings report which showed same store sales slowing and overall growth slowing.

That is the kiss of death for a “growth” stock- which Whole Foods used to be. From Marketwatch:

For its fiscal year 2008, which ends in September, Whole Foods backed its comparable-store sales forecast calling for growth between 7.5% and 9.5%.

“We believe management’s reiteration of same store sales guidance is highly optimistic,” wrote Bear Stearns analyst Robert Summers, who rates the stock underperform, the equivalent of a sell. “This stock, in our opinion, remains well on the path to becoming a value stock and encourage investors not to catch a falling knife.”

Whole Foods is trading at new 52 week lows. It might even be multi-year lows.

Is it really “catching a falling knife”?

I’m a value investor, at heart, so the comment by the analyst that the stock is on the way to becoming a value stock warms my little heart.

But it doesn’t seem cheap enough right now. It is still trading around 20 times earnings.

Normal valuations for determining a “value” stock are for earnings to be under 15x. Whole Foods is still too expensive for my blood.

I know many of you are extremely loyal to the brand. It’s not going anywhere. But in this market environment and economy- it will likely go much cheaper.

Seems like a falling knife scenario to me. Don’t buy it on the way down.

Good things come to those who wait.

[This author is a former Whole Foods shareholder and would gladly be so again- for the “right” price.]

You are watching history and you don’t even know it.

Nearly daily, crude oil and gasoline are hitting record highs. This is unchartered territory and hasn’t been seen in the economy for about 30 years.

How long will it sustain itself? When will the sell-off occur? How far will it fall when it finally sells off?

Who knows?

The momentum and the speculators are in the crude market now and it can run far higher than most people believe. That’s the thing with momentum- once it gets rolling it’s hard to stop.

I’ve talked in the past about how to benefit from the high crude prices- such as buying the explorers. But what about the refiners?

They are getting crushed as crude rises to these levels. They have to buy oil on the open market to refine into gasoline and even though gas prices are rising- they are not keeping up with crude prices. Which means the refiners’ margins are getting squeezed.

A few weeks ago, Valero said that it was slowing refining at its Midwest refinery because it “wouldn’t lose money for its shareholders.” What is it doing now? It’s losing money.

Refiners Are Switching to Diesel

The WSJ recently talked about how refiners were switching to refining more diesel fuel because diesel prices are higher and their margins are greater. This will also put a squeeze on regular gasoline inventories- which should push prices higher for gasoline.

That’s the point that is being lost here. As crude goes to these levels and the refiners continue to lose money- they will simply slow refining until gasoline prices rise enough for them to make money.

The refining stocks have been crushed in recent weeks. Several of them posted awful first quarter earnings- seeing earnings drop as much as 90%. The second quarter could be worse.

But the refiners could be a buying opportunity shortly. The squeeze on margins isn’t going to last forever. The rise in crude will moderate and prices will come down. But it’s likely gasoline prices will not- simply because the refiners will control supply to keep prices elevated so they can make some money. As the refining stocks get cheaper- they’ll become pretty juicy.

The largest free-standing refiner in America? Valero (VLO).

As crude prices rise and gasoline spikes, don’t just get mad…make money.

[The author of this article doesn’t own Valero. Not yet anyway.]

Everyone goes on and on about Exxon and its profits. It’s understandable given that people pull up to the gas station underneath signs that says “Exxon” or “Mobil” or “Marathon” etc. The consumer equates high gas prices with those names.

But as an investor- it pays to look away from those big names. Sure, Big Oil is making a lot of money. But it’s the smaller explorers that are making even more.

The exploration and production companies are in business to simply find oil and natural gas and get it out of the ground. The companies then sell it to other companies who refine it etc.

For these companies, their main product, crude, has doubled in price over the last year.

What happens to any company whose product doubles in a year? Their profits soar.

Devon Energy (DVN) reported today and saw record cash flow of $2.6 billion. The company easily beat the Street’s estimates by 41 cents a share.

Mariner Energy (ME) had the same story in the first quarter. Revenues up 49% over a year ago. Earnings per share rose 82%.

Stone Energy (SGY) saw $2.22 a share compared with 38 cents a share a year ago.

These are stunning gains.

For many of these companies, the average price per barrel was around $95 in the first quarter. Average natural gas prices were around $8.25 per million British thermal units. For the second quarter, crude is averaging over $100 a barrel. Natural gas is averaging over $9. Right now, natural gas is over $11 and could head higher.

What will these companies do in the second quarter?

They are cash cows. Money is flowing like there is no tomorrow.

Of course, the party will end at some point for these companies. Crude and natural gas prices WILL decline. But for right now- it’s not ExxonMobil that is making all the profits. It’s the explorers.

The next time you pull up to an Exxon station and curse, maybe you should be cursing Anadarko Petroleum or Apache instead.

Nah…not as fun.

The fertilizer stocks were among the best performing stocks in 2007. Some of them have tripled or quadrupled in only the last year- far outperforming technology glamour stocks like Apple and Google.

They are on a roll again right now.

Should you be buying in?

Should you catch the wave?

I tend to believe that jumping in with the herd is a bad thing- most times. But the fertilizer companies have been coming through with earnings to match their hot stock prices.

Just a few weeks ago, Mosaic (MOS) blew by analysts estimates and reported a huge quarter. MOS gave no indication that the good times were coming to an end anytime soon.

Next week, CF Holdings (CF), Potash (POT) and Bunge (BG) are all reporting earnings. Their stock prices have been soaring in anticipation of outstanding numbers.

What exactly is causing all this excitement?

The fertilizer companies have pricing power. As China and other countries grow, they need more food. The emerging market countries are buying more fertilizer than ever in order to increase their crops.

Today, China agreed to huge price increases in fertilizer in 2008. China has no choice. It needs the product. From the AP:

The contract between Canpotex Ltd., the export association of Saskatchewan potash producers, and China’s Sinofert calls for shipment of 1 million metric tons of potash at $576 per metric ton — a $400 per metric ton increase over the 2007 price, said Mosaic Co., a phosphate and potash fertilizer maker.

Mosaic, Potash and Agrium (AGU) are the three companies in the Canpotex program. All three will see HUGE gains from this news.

Should you buy? Or are the stocks bubbilicious?

This is the question. The stocks are on fire- going up 3% to 5% seemingly every day. As every stock investor knows- no tree grows to the sky. Eventually, the upward movement stops.

But the underlying fundamentals are still there for these companies. The earnings should support some of this stock price momentum. These aren’t dot-com stocks which make no money. They are making gobs of it - and should for all of 2008.

If you invest, be cautious. I’ve talked about the agriculture ETF in the past- ticker MOO. The Moo gets you several of the fertilizers plus other agriculture companies.

Stay tuned for fertilizer earnings and conference calls next Thursday. We’ll know more of the story then.