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$7.82 0.30 (3.99%)
2/9/2010 4:02 PM

Gruma S.A.B. de C.V. (GMK)

CAPS Rating:
****

The Company is a corn flour and tortilla producer and distributor.

Rating a stock in CAPS consists of three components:

Your call - Will this stock outperform or underperform the S&P 500? Successful picks are measured in terms of whether or not you were correct and by how many percentage points.

Your time frame - A guideline for other members to see whether your thinking is short or long-term. Time frame is also used to calculate the stock rating, but is not used in the scoring of your pick.

Your pitch - Here's your chance to offer more detailed thoughts, analysis, concerns, or the rationale behind your call. The pitch is optional and may be added later.

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What the Community Thinks

Total Members

343 Outperforms
13 Underperforms
 

All-Stars

150 Outperforms
2 Underperforms
 

Wall Street

2 Outperforms
0 Underperforms
 

Members bullish on GMK are also bullish on:

Members bearish on GMK are also bearish on:

Ticker Tags

Packaged Goods (27), Distressed (1597), International Stock (684), Food Products (94), Mexico (25), Small Cap (1645), Defensive (1457), Consumer Staples (230)
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Gruma S.A.B. de C.V. At A Glance

Current Price: $7.82
Last Trade Time: 2/9/2010 4:02 PM
Open: $7.61
Previous Close: $7.52
Daily Range: $7.51 - $7.91
52-Week Range: $0.91 - $9.14
Volume: 13,603
Market Cap: $1.10B
P/E Ratio: 50.13
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Stock Trends

GMK VS S&P 500 (SPY)

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Top Bull Pitch

Recs

2

Gruma S.A.B. de C.V. (GMK)

Avatar cdulan (92.98) Submitted: 1/13/10 5:02 PM

Is there a more stable business than having the #1 torilla brand in Mexico and the US?

Gruma has $3B USD in annual sales and is a market leader in the US, Mexico, Venzuela and a few other countries. They saw a 1% increase in revenue this year (excluding currency issues). Operating margin for the b...More

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Top Bear Pitch

Recs

1

Gruma S.A.B. de C.V. (GMK)

Avatar Masterofdabull (94.88) Submitted: 5/21/09 4:24 PM

None of the numbers look good. Yet investors keep buying.
Profit margin of (-)27%. Return on equity (-)51%.
Debt is at 1.09 B (mrg). Only 2.3% held by institutions.
Market cap of 584 m.
All this and some very hefty competitors. (Cargill)

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Recs

0

 (GMK)

Avatar DarthMaul09 (33.46) Submitted: 2/06/10 3:19 AM : Outperform Start Price: $7.53 GMK Score: 4.66

This company is as basic as General Mills in the US. The market as a whole may move up and down with wild speculation as every new crisis leads to irrational selling, but companies like this will likely just keep making money and at some point beat the S&P 500 by enough to gain a percent and point profit.

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Recs

0

 (GMK)

Avatar DavidSobel (38.25) Submitted: 2/01/10 6:34 PM : Outperform Start Price: $8.75 GMK Score: -5.00

Now who doesn't love tortillas with every meal

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Recs

0

 (GMK)

Avatar Momentum21 (92.12) Submitted: 1/27/10 1:28 PM : Outperform Start Price: $8.40 GMK Score: -5.42

Porte and other pitches. For watchlist...I love tortillas!

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Recs

2

 (GMK)

Avatar cdulan (92.98) Submitted: 1/13/10 5:02 PM : Outperform Start Price: $6.97 GMK Score: 14.05

Is there a more stable business than having the #1 torilla brand in Mexico and the US?

Gruma has $3B USD in annual sales and is a market leader in the US, Mexico, Venzuela and a few other countries. They saw a 1% increase in revenue this year (excluding currency issues). Operating margin for the business increased in 2009 to 6.3% from 4.6% last year. Operating profits totaled close to $100m USD for 2009. YAWNN!!!!! Are you bored yet? Let's get to the real questions.

A year ago GMK was caught in a horrible hedging position as corn prices collapsed that caused an $800M+ USD loss for 2008. A massive "DOOHHH!" The GMK was saved by banks (most likely the same banks that sold them the derivatives) and now is liable for a $660m USD note which comes due in 2014. So why invest?

Value, mi amigo. Value.

The current market capitalization for GMK is $1B. At the current amortization rate (and assuming they once again refinance to a yet smaller debt position again in 2014) the company should still hold at least a $1.5B market cap. The credit crisis may not be over, but viable businesses like GMK are not likely to remain exposed in the same way as pre-2008. Let's take advantage of this painfully gained wisdom and buy GMK.

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Recs

0

 (GMK)

Avatar Clint35 (60.02) Submitted: 12/08/09 6:15 AM : Underperform Start Price: $7.56 GMK Score: -6.00

the P/E is too high. I doubt they're growing fast enough to justify it.

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Wall Street

Results 1 - 2 of 2  

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Top
Pick
Member NameMember RatingStart
Date
CallTime FrameStart
Price
Stock
Gain
S&P
Gain
ScorePitch
TrackHSBC 86.09 10/03/07 Outperform NS $13.35-41.42%-26.97%-14.46
TrackUBS 87.99 04/10/07 Outperform NS $12.70-38.40%-21.66%-16.74

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