1 Stock to Buy for February

1 Stock to Buy for February

On Monday of this week, I introduced Fools to five companies that I was considering adding to my Roth IRA. I've been doing this -- picking out one stock per month -- for about 18 months now. My picks are averaging a 14.3% return since I started, which is outperforming the S&P 500 by more than 2 percentage points .

Read below to see which company made the cut, and at the end, I'll offer up access to a special premium report on the business.

Those that didn't make it
Of course, before telling you which company I'm buying, I wanted to let you know why the other four companies didn't make the cut.

First, there's Apple . I've voiced long-term concerns over my holdings of Apple before. To keep it short and sweet, I'm worried about the long-term effect the loss of Steve Jobs will have on innovation at the company. Sure, there have been some big hits since his death, but he likely had a big hand in those developments. I'm waiting for a post-Jobsian product to come out before buying shares again.

Next we have Baidu -- the Chinese search engine that has grown revenue by 63% per year over the past five years, and grown earnings per share by 75% per year over the same time frame; and it trades for just 24 times earnings. I still love this company, it's just that, at this point, it accounts for over 20% of my IRA -- that's too much.

And when it comes to the other two companies I offered up -- Intuitive Surgical and Google -- I can't find much reason not to buy them -- other than the fact that I like the company I'm buying even more.

My stock to buy for February
That means the stock I'll be buying this month is Whole Foods . There are a lot of reasons to like this company, but I'll be zeroing in on just two of them: the company's long-term operating performance and the sustainability of the organic movement it is benefiting from.

First, let's focus on the numbers. Since the depths of the Great Recession hit in 2009, Whole Foods has been able to increase revenue by about 13% per year. That's not bad when you consider that between 2000 and 2010, total food sales in the U.S. grew by just 3.05% per year. In other words, Whole Foods is growing revenue over four times faster than the entire U.S. food market.

Even more pleasing for investors is the fact that the company has grown earnings per share by a whopping 44% over the same time frame. The main reason the company has been able to do this: expanding its net margins from 1.48% in 2009 to 3.98% today. In other words, the company now keeps 2.7 times more of every dollar it brings in to bank as profit. That's an amazing improvement in just three years!

This isn't a fad, it's a long-term trend
But beyond the numbers, there's an even more important story taking place here. People in the United States are beginning to realize that the relationship they have with the food they put in their bodies is an important one. It's one that shouldn't be largely delegated to fast-food restaurants and TV-dinner companies.

My wife and I have spent part of the last three years volunteering on a small family-run organic coffee farm in Costa Rica. Two years ago, the farm was getting about 10 people -- mostly American and Canadian -- per month visiting to take a tour of its operations. These days, there are about 10 people visiting per week.

This isn't a fad our country is going through; it's a return to healthy eating. Since 2000, sales of organic foods and beverages have increased from $6.1 billion to $29.2 billion in 2011.

And yet, when you look at the industry as a whole, there's still tons of room for growth.

Source: Organic Trade Association. Amounts in billions.

As of 2011, organic products still represented only 4.5% of all food and beverage purchases. Even a pretty modest goal of 15% penetration in 10 years means a more than tripling of market share. When you combine that with the fact that Whole Foods believes it can build 1,000 stores state-side -- and is only at 344 now -- you can see why I think the company is worth buying.

It may not be too late to participate in the long-term growth of this organic foods powerhouse. In our brand-new premium report on the company, we'll walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. The report digs far deeper than I can in one article, and we're also providing a full year of regular analyst updates to go with it, so make sure to claim your copy today by clicking here.

The article 1 Stock to Buy for February originally appeared on Fool.com.

Fool contributor Brian Stoffel owns shares of Apple, Google, Baidu, Whole Foods Market, and Intuitive Surgical. The Motley Fool recommends Apple, Baidu, Google, Intuitive Surgical, and Whole Foods Market. The Motley Fool owns shares of Apple, Baidu, Google, Intuitive Surgical, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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