"One of ace investor Peter Lynch's favorite business models is the "cookie-cutter," which simply involves building the same successful store again and again in new places; McDonald's perfected the model, and Whole Foods Market (WFMI) is following the same profitable path, though at a higher price poin," says Timothy Lutts, who has chosen the stock as his featured monthly buy recommendation.

The editor of Cabot Stock of the Month explains, "McDonald's competed on price; Whole Foods competes on quality, targeting the consumer who wants healthy organic food and will pay more to get it.

Whole Foods (WFMI) posted strong second quarter earnings of 39 cents per share, compared to the Thomson/Reuters First Call estimate of 33 cents, but I still don't like the shares. Here's why:

Same store sales rose 8.7% in the quarter, but the sales gain occurred amid an easier comparison with the same period a year ago, or what institutional investors call "easy comps."

Whole Foods Market (WFMI) has been one heck of a nice investment over the last 12 months. The 52-week low is $17.16; the 52-week high is $40.70. The company reported its second-quarter numbers on Wednesday after the bell, and once the traders took a look at the data, they decided to push the stock even higher. It reached $42.85, which means that the stock was up over 6% from yesterday's close of $40.25.

Of course, we'll have to see what Thursday's regular session brings for the company. No matter what, though, I'm sure many players want a reason to bet on this business. The one-year chart shows an upward trend, albeit with one big rough patch in the middle.

Ford (F) closed at $13.34. F April put option implied volatility is at 36, June is at 42; near its 26-week average of 46, according to Track Data, suggesting decreasing price movement.

Whole Foods (WFMI) closed at $36.30. WFMI April put option implied volatility is at 30, May and August puts are at 39; verses its 26-week average of 43 according to Track Data, suggesting decreasing price movement.

CBOE Volatility Index (VIX) at 17.57; 10-day moving average is 18.32, 50-day is 20.90, 200-day moving average is 24.06.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Apollo Group Inc. (APOL) second quarter EPS guidance fell short of analysts' estimates, sending shares lower.
• CBS Corp. (CBS) higher Q4 earnings were in line with analysts' expectations but free cash flow declined.
• Deere & Co. (DE) posted higher Q1 earnings that easily topped expectations, sending shares sharply higher.
• Gap Inc. (GPS) received a downgrade from an analyst that foresees contracting earnings, returns and margins.
• Hewlett-Packard Co. (HPQ) better-than-expected Q1 results were accompanied by a better-than-expected outlook.

Today saw mixed economic data in housing and in industrial production, yet the market rose again. The notion that a fed-exit policy is slowly forming had no significant impact on stocks and mush of the traffic still seems earnings-related.

Here were today's unofficial closing bell levels:

Dow 10,309.24 +40.43 (0.39%)
S&P 500 1,099.51 +4.64 (0.42%)
Nasdaq 2,226.29 +12.10 (0.55%)

Top Analyst Upgrades/Downgrades
Top Stock & Market Rumors

Grocer giant Whole Foods (WFMI) reported its first quarter results Tuesday, easily beating out analyst estimates for the quarter.

As we noted in our earnings preview for Whole Foods, analysts had forecast that the company would be announcing that it earned 26 cents per share during the quarter. Actual results were much stronger, at a reported 32 cents per share.

During the same period last year the company had earnings of 20 cents per share.

U.S. stock futures advanced Wednesday, pointing to a higher start on Wall Street as investors' optimism was boosted by earnings and a strong performance Tuesday. Investors also await housing and industrial data to get a better picture on the state of the U.S. economy.

On Tuesday, U.S. markets posted their biggest daily percentage gain in three months. Better-than-expected results from several heavyweights, including some banks in Europe, as well as strength in Europe as the sovereign debt concerns subsided somewhat contributed to the strong performance. Strong manufacturing data only served to improve sentiment even more. On Wednesday, investors are looking to extend Tuesday's gains.

As so often happens at this point in the earnings season, focus begins to shift to the results from retailers. And the world's largest retailer is among those that step into the spot light this week.

Analysts surveyed by Thomson Reuters are looking for Wal-Mart Stores Inc. (WMT), which was aggressively competitive during the holiday shopping season and also recently announced a new global strategy, to report fourth-quarter earnings of $1.12 per share, up from $1.03 per share in the year-ago period. Revenue for the three months that ended in January is expected to have risen 4.9% to $114.5 billion. The full-year forecast calls for earnings of $3.61 per share (+5.3%) on $409.1 billion in revenue (+0.9%). Walmart has not missed earnings estimates in the past five quarters.

Speaking as a guy who normally eats out or watches my wife do all the cooking, I can say that nothing is more appreciated by hardworking wives and mothers than a great meal they didn't have to prepare.

That's where Whole Foods (WFMI) comes in with gourmet meats and cheeses that make simple recipes delicious -- even for inexperienced chefs.

Valentine's Day may be a commercialized holiday to some, but there's no denying that its big business. And this coming Valentine's Day may be extra sweet since it falls on a Sunday, making it a great excuse for a romantic night out. In fact, total Valentine's Day spending is expected to reach $17.6 billion this year, up 3.3% over 2009, according to consumer spending researchers at IBISWorld.

That's a big payday, and one that investors should be paying attention to.

I finally got it. That state of euphoria after you nourish your body with a life altering meal. Not just the flavors and tastes, but the entire dining experience including the smells (and lack of some smells), lighting, music, seats, everything. The experience that enables you to forget that you're in the middle of a bustling and boisterous city. As I leave Casa Satya and prepare to re-enter the city, I contemplate the impact of my life choices on my body.

Eating less is being rewarded in a strange new way. Thinner employees at Whole Foods (WFMI) will enjoy deeper discounts on food, leading to an even wider disparity relative to the ... ummmm ... "bigger-boned" employees. A new employee rewards program called "Health Starts Here" offers employees discounts based on body mass index. Hit the gym, go for a jog or simply enjoy the perks of a naturally buzzing metabolism, and you can save a fortune. Carry around a little extra heft, and you'll pay more to maintain it.

At present, every Whole Foods employee receives a 20% discount on purchases in the store. By sweating to the oldies, however, they can take that discount to 30%. But dieting like a model won't work: nicotine use is a disqualifier. So, if you're trying to smoke your way to svelte, find another way.

With close to 60 million users, Twitter is a force corporate marketing departments just can't ignore. The reach offered by this microblogging platform is profound, and skipping it means yielding digital turf to the competition.

Yet, as the country's major brands have flocked to Twitter, not all have mastered it. Some merely push headlines and deals, while others have used it as a way to open a dialogue with their customers, build relationships and ultimately grow their businesses. A study by The Big Money sought to determine the dozen companies that are mastering Twitter and why they are the masters.

All three of the major indexes finished Tuesday in the red, but there were several big names that moved up to new 52-week highs in Tuesday's trading.

Walgreen Co. (NYSE: WAG): The drugstore giant had a really good day on Wall Street after posting better than expected earnings in the morning before the market opened. The company posted earnings of 44 cents per share versus analyst estimates of 39 cents. The stock set a new 52-week high of $38.44 and closed the day up 9.2% at $37.35.