Winners And Losers From Amazon's Purchase Of Whole Foods

When the dust finally settled on Amazon.com, Inc. (NASDAQ: AMZN)’s historic $13.7 billion buyout bid for Whole Foods Market, Inc. (NASDAQ: WFM) on Friday, Whole Foods stock was up 29.1 percent on the day, while Amazon stock finished the day up 2.4 percent as well. The deal has such wide-reaching ramifications that it will impact a number of competitors, investors and companies outside of the grocery business as well.

Related Link: The Sell-Side Response To Amazon–Whole Foods Deal

Here’s a look at some of the biggest potential winners and losers from the Amazon/Whole Foods buyout.

Winner: Whole Foods

Not only did Whole Foods shares jump to $42 on the buyout news, the stock continued its momentum on Monday with an additional 1 percent gain. Shares are trading $1 above the buyout price on hopes that Wal-Mart Stores Inc (NYSE: WMT) or another Amazon rival may outbid Amazon as a defensive play.

Losers: Other Grocery Stores

Kroger Co (NYSE: KR) shares tumbled 9.2 percent on Friday after a 18.8 percent drop on Thursday. Sprouts Farmers Market Inc (NASDAQ: SFM) shares dropped 6.2 percent, Target Corp (NYSE: TGT) shares dropped 5.1 percent, Costco Wholesale Corp (NASDAQ: COST) shares tumbled 7.1 percent, and Walmart stock declined 4.6 percent. “Today is a day that will live in infamy for everyone who sells groceries in this country,” CNBC analyst Jim Cramer said.

Winner: Transportation Stocks

The companies that will be responsible for making many of these new Amazon grocery deliveries will be major beneficiaries of the deal. The news is “unequivocally positive” for XPO Logistics Inc (NYSE: XPO) and also good news for Old Dominon Freight Line (NASDAQ: ODFL), TRC Worldwide Inc (NASDAQ: YRCW) and ArcBest Corp (NASDAQ: ARCB) as well, Credit Suisse analyst Amit Mehrotra wrote on Sunday.

Loser: PowerShares Dynamic Retail ETF

The good news for investors is that Whole Foods makes up 3.4 percent of the PowerShares Dynamic Retail (ETF) (NYSE: PMR)'s total weighting, according to ETF Channel. The bad news is that Kroger (3.8 percent), Costco (4.7 percent) and Walmart (4.8 percent) all represent even higher weightings, while Amazon is nowhere to be found.

Winner: Janna Partners, LLC

Activist hedge fund Janna Partners owned more than 26 million shares of Whole Foods stock as of the fund’s last 13F filing. That means that the value of Janna’s stake jumped by nearly $250 million on Friday alone.

Loser: Whole Foods Suppliers

Whole Foods suppliers United Natural Foods, Inc. (NASDAQ: UNFI), Hain Celestial Group Inc (NASDAQ: HAIN) and others may no longer get as sweet of a deal under Amazon. Cramer says investors should avoid most stocks at this point.

Winner: Grocery Technology Stocks

Don’t expect Walmart, Costco and others to sit idly by while Amazon steals their business, JPMorgan analyst Paul Coster said Monday. “We suspect the AMZN–WFM combination could introduce urgency into retailers’ technology investments,” wrote in a new note.

Coster named self-checkout technology leader NCR Corporation (NYSE: NCR) as his top grocery tech play, but also mentioned Oracle Corporation (NYSE: ORCL), Pitney Bowes Inc. (NYSE: PBI), salesforce.com, inc. (NYSE: CRM) and others as potential partners with the rest of the grocery industry.