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

i think we may have a winner.

Everyone loves to eat Tex-Mex, and you can't do it without tortillas. This 60-year old Mexican company Gruma S.A.B de C.V. (GMK) took a hands-on mom-and-pop process and has commercialized tortilla making on an unprecedented scale. GMK makes and distributes tortillas at a lower price than it costs most Latin American families to make tortillas themselves. How can GMK keep prices so low as to fend off competitors? Because GMK obtains its supplies (corn, flour, etc.) from its 23% equity investor, the commodity conglomerate Archer Daniels Midland (ADM).

GMK operates in Mexico, the United States, Central America, and Venezula. It recently started operations in Europe. I'd like to see Tex-Mex food storm into Africa (but that's another story). And a little while back, I came upon a NYTimes article about Korean tacos: http://www.nytimes.com/2010/07/28/dining/28united.html?_r=1&pagewanted=all

MAC

this company isn't priced right!

high debt needs refinancing in 2014, but likely at more favorable terms than 2008. Also, risk of adverse pricing on corn prices (which are trending up dramatically due to crop losses worldwide and increased methanol use) needs to be hedged without undue risk to the company. But those factors ,if in control, will allow this pure play on tortilla and corn flour, which are rising at 10% annually and diversified between Mexico, US and Venezuela to show continued growth, along with the Hispanic population and increasing popularity of these products in the U.S.
Rest assured this company will return to the 10-14$ range(where it traded prior to errors made by the company in 2008) within a year.

Yes!

Product will always be in demand. Good takeover potential

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

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.

so many uses

BRAVOBEVO'S pitch

ccest compte

Dang, I just wish that I would have bought this with real money back when I gave it the thumbs up. Oh well.

GMK one notch away from very bullish on stockta.com. Open gap yesterday. Very bullish candle pattern. breakout at $4.60?

Fundamentally - meat prices are being discounted at local supermarkets. As meat prices decline feeding margins get squeezed. Deceased feed demand would lower corn prices further. Looks like we have a bumper corn crop coming with decreased demand. This would expand milling margins for possibly record profits for Gruma going into 2010.

BravoBevo + portefeuille = more than good enough for me.

because we all eat corn

GMK makes tortillas. That is pretty much the only good thing coming out of Mexico besides drugs. How can this one not dominate.

This company beat the average before the economy fell. If took a harder hit than the average and now it is time for it to bounce back to catch up to the overall market for similar products. As things improve this stock will rise more quickly until it overtakes the industry once again.

I love tortillas